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1. An overview of a firm's cost of debt The Is the Interest rate that a firm pays on any new debt financing Cold Goose

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1. An overview of a firm's cost of debt The Is the Interest rate that a firm pays on any new debt financing Cold Goose Metal Works (CGMW) can borrow funds at an interest rate of 10.20% for a period of four years. Its marginal federal-plus-state tax rate is 45. CGMW's after-tax cost of debt is (rounded to two decimal places). At the present time, Cold Goose Metal Works (CGMW) has a series of fifteen year noncalable bonds with a face value of $1,000 that are outstanding, These bonds have a current market price of $1,106,50 per bond, carry a coupon rate of 1234and distribute annual coupon payments. The company Incurs a federal-plus-state tax rate of 45%. If Cow wants to issue new debt, what would be reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 6.4% 6.729 5.50%

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