(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays...
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(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 11 percent annual interest and matures in 11 years, Investors are willing to pay 5940 for the bond. Flotation costs wit be 13 percent of market value. The company is in a 40 percent tax brackot. What will be the firm's after-tax cost of debt on the band? The firm's after-tax cost of debt on the bond will be 0% (Round to two decimal places)
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