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5. ABC Co. has $15 million of debt outstanding with a coupon rate of 9%. Currently, the yield to maturity on these bonds is 7%.

5. ABC Co. has $15 million of debt outstanding with a coupon rate of 9%. Currently, the yield to maturity on these bonds is 7%. If the firms tax rate is 35%, what is the after-tax cost of debt?

A. 10.76% B. 5.85% C. 4.55% D. 5.40%

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