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A firm has outstanding debt with a coupon rate of 8 % , seven years maturity, and a price of $ 1 , 0 0

A firm has outstanding debt with a coupon rate of

8 %,

seven years maturity, and a price of $

1, 000 .

What is the after

-

tax cost of debt if the marginal tax rate of the firm is

35 % ?

Question

100

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