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Calculating Cost of Debt One Step, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 17 years

Calculating Cost of Debt

One Step, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 17 years to maturity that is quoted at 95 percent of face value. The issue makes semiannual payments and has a coupon rate of 6 percent. What is the companys pretax cost of debt? If the tax rate is 21 percent, what is the after tax cost of debt?

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