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Advanced Global Logistics is working with an investment banker to issue new debt. The bonds have a $1000 face value, a 25 year maturity, and
Advanced Global Logistics is working with an investment banker to issue new debt. The bonds have a $1000 face value, a 25 year maturity, and will pay a coupon rate of 6% semi-annually. The current quote is 106. If the investment firm charges them a commission of 2.5%, what is their after-tax cost of debt? Advanced Global's tax rate is 21% a) 3.56% O) 4.54% c) 2.27% d) 6.22%
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