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BG Company has outstanding a series of $1,000 par value, 7% coupon bonds that mature in 12 years. The bonds currently sell for $895. BGs

BG Company has outstanding a series of $1,000 par value, 7% coupon bonds that mature in 12 years. The bonds currently sell for $895. BGs current tax rate is 45%. What is BGs after-tax (component) cost of debt?

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