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A Corporation is contemplating a new investment to be financed with debt. The firm could sell new $1,000 par value bonds at a net price
A Corporation is contemplating a new investment to be financed with debt. The firm could sell new $1,000 par value bonds at a net price of $950. The coupon interest rate is 13%, and the bonds would mature in 15 years. If the company is in a 34% tax bracket, what is the after-tax cost of capital to Cooper for bonds?
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