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ABC Corporation has issued bonds with a face value of $ 1 , 0 0 0 , 0 0 0 and are trading at a

ABC Corporation has issued bonds with a face value of $1,000,000 and are trading at a yield to maturity (YTM) of 7.25%. The bonds have a coupon rate of 6% and mature in 10 years. The corporate tax rate is 30%. Calculate ABC's after tax cost of the existing debt.

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