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Gamblers Casino is undergoing a major expansion. The expansion will be financed by issuing new 20-year, $1,000 par, 5% annual coupon bonds. The market price of the bonds is $970 each. Gamblers flotation expense on the new bonds will be $30 per bond. Gamblers marginal tax rate is 40%. What is the after tax cost off debt for the newly issued bonds?

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Financial Management, Finance

Category:- Financial Management
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