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Cheegg.com issues a bond with par value of $1,000 that will be paying 6 percent...

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Finance

Cheegg.com issues a bond with par value of $1,000 that will be paying 6 percent coupon rate and will mature in 5 years. The current market price for the bond is $950, with a flotation cost of 12 percent based on the market price. What will be Cheegg's after-tax cost of debt if the company pays taxes at the 40% rate?

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