ABC Corp. is undergoing a major expansion. The expansion will be financed by issuing new 12-year, $1,000 par, 9.5% annual coupon bonds. The market price of the bondsis $1,125 each. Flotation expense on the new bonds will be $50 per bond. The marginal tax rate is 35%. What is the pre-tax cost of debt for the newly-issued bonds?
The pre-tax cost of debt for the... View the full answer