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A firm has issued $6 million in bonds paying 5.4% per annum with semi-annual coupons. The bonds have exactly 10 years remaining until maturity and
A firm has issued $6 million in bonds paying 5.4% per annum with semi-annual coupons. The bonds have exactly 10 years remaining until maturity and they are trading on the market at a discount of 4.201%. The effective corporate tax rate is 30.3%. What is the firm's after-tax cost of capital for these bonds? Answer with at least four decimal places for the percentage.
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