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A corporation can sell new 15-year American-style bonds at a price of $850 after flotation costs. The bonds will carry an 8% coupon rate (semiannual

A corporation can sell new 15-year American-style bonds at a price of $850 after flotation costs. The bonds will carry an 8% coupon rate (semiannual pay), and the company's tax rate is 40%.

Determine the annual nominal after-tax cost of debt.

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