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A firm has outstanding debt with a coupon rate of 7% (the coupon is paid on an annual basis), seven years to maturity, and a

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A firm has outstanding debt with a coupon rate of 7% (the coupon is paid on an annual basis), seven years to maturity, and a price of $1000. The face value of the bond is $1000. What is the after-tax cost of debt if the marginal tax rate of the firm is 30%? A. 4.9% B. 5.2% C. 5.5% D. 5.9%

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