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Assume that PomPom Ltd. has K1,000 par value, zero-coupon paying bonds outstanding. PomPom Ltd. bonds are currently trading at K52.64 with 7 years to maturity

Assume that PomPom Ltd. has K1,000 par value, zero-coupon paying bonds outstanding. PomPom Ltd. bonds are currently trading at K52.64 with 7 years to maturity and the effective tax bracket is 40%. Calculate the after-tax cost of debt.

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