38.

Cost of debt using the approximation formula For the following $1,000-par-value bond, assuming annual interest payment and a 21% tax rate, calculate the after-tax cost to maturity using the approximation formula. Life 20 years Underwriting fee $25 Discount (-) or premium (+) - $20 Coupon interest rate 9% The after-tax cost of financing using the approximation formula is %. (Round to two decimal places.)