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Demetres Is Refunding an Outstanding $75 Million, 9

Question 19

Multiple Choice

Demetres is refunding an outstanding $75 million, 9.35% debenture with a $75 million 7.80% debenture. Both issues will be outstanding for a 3-week period. If Demetres' marginal tax rate is 40%, what is the overlapping interest?


A) $337,500
B) $242,740
C) $404,567
D) $202,500

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