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If a Corporation Issued $4,000,000 in Bonds Which Pay 10

Question 114

Multiple Choice

If a corporation issued $4,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?


A) $4,000,000
B) $120,000
C) $400,000
D) $280,000

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