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(Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 8.6 percent annual interest and matures in 15 years. Investors are

(Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 8.6 percent annual interest and matures in 15 years. Investors are willing to pay $950 for the bond and Temple faces a tax rate of 31 percent. What is Temple's after-tax cost of debt on the bond?

The after-tax cost of debt is ________%

The answer is not 6.97% which is what I keep getting.

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