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A company has an outstanding bond issue with a 7.75% coupon, paid semiannually, a current maturity of 20 years, and it sells for $967.97. The

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A company has an outstanding bond issue with a 7.75% coupon, paid semiannually, a current maturity of 20 years, and it sells for $967.97. The firm's income tax rate is 40%. What should the firm's managers use as an after-tax cost of debt for cost of capital purposes? 8.0896 4.04% 2.42% 4.85%

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