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A recent leveraged buyout was financed with $SOM: $12M in equity capital, $20M unsecured debt borrowed at 7% from one bank, and the remaining debt

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A recent leveraged buyout was financed with $SOM: $12M in equity capital, $20M unsecured debt borrowed at 7% from one bank, and the remaining debt from another bank at 8.5%. What is the overall after-tax cost of the debt financing if the firm's marginal tax rate is 33%? 0 7.71% 0 3.34% 0 5.17% 0 2.55%

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