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Bowen's Casinos recently sold an issue of 15-year maturity bonds. The bonds were sold at $955 each. After issuance costs, Bowen received $948 each. The
Bowen's Casinos recently sold an issue of 15-year maturity bonds. The bonds were sold at $955 each. After issuance costs, Bowen received $948 each. The bonds have a $1000 maturity value and a 7 percent coupon rate. The coupon is paid annually. What is the after-tax cost of debt for these bonds if Bowen's effective tax rate is 40 percent?
A.4.25% |
B.4.55% |
C.5.25% |
D.5.55% |
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