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A firm issued 100,000 shares of corporate bond. The bond has a maturity of 15 years, 5% coupon rate with semi-annual coupon payments, $1,000
A firm issued 100,000 shares of corporate bond. The bond has a maturity of 15 years, 5% coupon rate with semi-annual coupon payments, $1,000 face value, and a price of $950. Suppose the corporate tax rate is 40%, what is the after-tax cost of debt?
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Financial Markets and Institutions
Authors: Anthony Saunders, Marcia Cornett
6th edition
9780077641849, 77861663, 77641841, 978-0077861667
