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A company issued $20 million lin long term bonds at par value 3 years ago with a coupon rate of 10%. The company has decided
A company issued $20 million lin long term bonds at par value 3 years ago with a coupon rate of 10%. The company has decided to issue an additional $20 million in bonds and expects the new issue to be priced at par value with a coupon nate of 8%. There is no other outstanding deht. The opplicable tax rate is 35%. The appropriate after-tax. cost of debt in order to compute the WACC is closest to: less than 5x 6.1 5.2%
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