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Cost of Debt: a. What would be the after-tax cost of debt for a company with the following yields to maturity for its new bonds,

Cost of Debt:

a. What would be the after-tax cost of debt for a company with the following yields to maturity for its new bonds, if the applicable interest subsidy tax rate 20 percent?

1. YTM = 7%

2.YTM = 11%

3.YTM = 13%

b. How would the cost of debt change if the applicable interest subsidy tax rate were 25 percent?

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