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Benefit Ltd has issued bonds that never require the principal amount to be repaid to investors and the firm must make interest payments perpetually. If
Benefit Ltd has issued bonds that never require the principal amount to be repaid to investors and the firm must make interest payments perpetually. If the bondholders receive annual payments of $80 and the current price of the bonds are $1600 and the firm is subject to a 30% tax rate, calculate the after tax cost for this debt.
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