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Cost of debt) Temple-Midland, Inc. is issuing a 1000 par value bond that pays 8.4 percent annual interest and matures in 15 years. Investors are

Cost of debt) Temple-Midland, Inc. is issuing a 1000

par value bond that pays 8.4 percent annual interest and matures in

15 years. Investors are willing to pay $953 for the bond and Temple faces a tax rate of

35 percent. What is Temple's after-tax cost of debt on the bond?

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