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9-4. Mary Lynn Eatenton is the chief financial officer of Magnolia Steel, Inc. She Cost of Debt has asked Trudy Jones, one of the financial

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9-4. Mary Lynn Eatenton is the chief financial officer of Magnolia Steel, Inc. She Cost of Debt has asked Trudy Jones, one of the financial analysts, to calculate the after-tax cost of debt based on different bond yield to maturity rates. Magnolia Steel's current tax rate is 34 percent, but increasing sales and profits will put them in the 40 percent tax bracket by the end of the year. Calculate the after-tax cost-of-debt figures that will be shown in Ms. Jones's report at each tax rate for the following YTM rates. a. Yield to maturity, 8%. b. Yield to maturity, 14%. c. Yield to maturity, 16%

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