1 IU JOJ MI PILLT view Enable Editing B 13.3 Current cost of a bond: You are analyzing the cost of debt for a firm. You know that the firm's 14-year maturity, 8.5 percent coupon bonds are selling at a price of $823.48. The bonds pay interest semiannually. If these bonds are the only debt outstanding for the firm, what is the after-tax cost of debt for this firm if the firm is in the 30 percent marginal tax rate? Maturity (years) Coupon rate Bond price Coupon frequency (per year) Firm's tax rate 8.50% $823.48 30% 4.00% Before-tax cost of debt (semi-annual) Before tax cost of debt (annualized) After-tax cost of debt (annualized) O Type here to search