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Cost of Debt RC Cola issued 1 0 year bonds 2 years ago with a 6 % coupon payment. The bonds are currently selling for

Cost of Debt

RC Cola issued

10

year bonds

2

years ago with a

6 %

coupon payment. The bonds are currently selling for

97 %

of its face value, or $

970 .

What is RC Cola's after

-

tax cost of debt? Assume semi

-

annual coupon payments and a

26 %

tax rate.

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