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QUESTION
Your new company has the following information available to you for capital budgeting decision making Source of capital Target market weights Long
100%
DEBT - The firm can sell a 12 year, $1,000 par value, 7% coupon interest rate bond for $960
A flotation cost of 2% of the face value would be required in addition to the $40 discounted bond price ($1,000-$960)
