Belton is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 13 years. Investors are willing to pay $940 for the bond. Flotation costs will be 14 percent of market value. The company is in a 22 percent tax bracket. What will be the firm’s after-tax cost of debt on the bond?

Belton is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 13 years. Investors are willing to pay $940 for the bond. Flotation costs will be 14 percent of market value. The company is in a 22 percent tax bracket. What will be the firm’s after-tax cost of debt on the bond?

Belton is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 13 years. Investors are willing to pay $940 for the bond. Flotation costs will be 14 percent of market value. The company is in a 22 percent tax bracket. What will be the firm’s after-tax cost of debt on the bond?