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b) Samsung Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is
b) Samsung Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is quoted at 97% of face value. The issue makes semiannual payments and has an embedded cost of 5% annually. Assume the par value of the bond is $1,000. a) What is the company's pre-tax cost of debt? b) If the tax rate is 40%, what is the after-tax cost of debt
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