Business, 07.12.2020 03:00 sarah192002

eaceful Book Binding Company is considering issuing a new 20-year debt issue that would pay an annual coupon payment of $80. Each bond in the issue would carry a $1,000 par value and would be expected to be sold for a price equal to its par value. PBBC’s CFO has pointed out that the firm would incur a flotation cost of 1% when initially issuing the bond issue. Remember, the flotation costs will beadded to the proceeds the firm will receive after issuing its new bonds. The firm’s marginal federal-plus-state tax rate is 30%.

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eaceful Book Binding Company is considering issuing a new 20-year debt issue that would pay an annua...

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