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Business, 29.11.2020 14:50 Thisisdifinite

Calculate the after-tax cost of debt using following bond information. A four year bond has a 7 percent coupon rate and a $1000 face value. If the market value of the bond is $788, assuming that the bond makes annual coupon payments and the tax rate is 35%. a. 7.16 %
b. 14.32 %
c. 12.12 %
d. 9.31 %
e. 5.01 %

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