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Cost of debt for a firm: You are analyzing the after-tax cost of debt for a firm. You know that the firms 12-year maturity, 9.5
Cost of debt for a firm: You are analyzing the after-tax cost of debt for a firm. You know that the firms 12-year maturity, 9.5 percent semiannual coupon bonds are selling at a price of $1,200. If these bonds are the only debt outstanding for the firm, what is the after-tax cost of debt for this firm if it has a marginal tax rate of 34 percent? What if the bonds are selling at par?
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