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Buchanan Corp. is refunding $10 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 35%. The call premium is 9%. what is the net cost of the call premium after taxes?

a) 390,000

b)1,080,000

c) 585,000

d) 702,000

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M938833

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