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Business, 21.08.2019 04:00 brmoen1392

Mountain retreat and resort is undergoing a major expansion. the expansion will be financed by issuing new 15-year, $1,000 par, 9% annual coupon bonds. the market price of the bonds is $1,070 each. the firm's flotation expense on the new bonds will be $50 per bond. the firm's marginal tax rate is 35%. what is the relevant cost of the new bonds for capital budgeting purposes? a) 5.14%b) 5.69%c) 8.45%d) 4.82%

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