5

The Leveraged Corporation has an 8-year bond outstanding with a coupon rate of 12 percent and a price of $942.5) If the bond pays its coupons semi-annually and the firm's marginal tax rate is 40%, its after-tax cost of debt is. (Do not round intermediate calculations. Round the percentage answer to two decimal places.) 13.18% 3.96% 6.59% 7.91%