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Consider a company that has nontraded $100 million of debt outstanding that has a debt-rating of AA. The yield on AA debt is currently 6.2%.

Consider a company that has nontraded $100 million of debt outstanding that has a debt-rating of AA. The yield on AA debt is currently 6.2%. What is the after-tax cost of debt if the marginal tax rate is 40%? a. 6.20% c. 2.48% b. 3.72% d. 5.50%

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