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(Cost ofdebt) Belton Distribution Company is issuing a $1,000 par value bond that pays 7.0 percent annual interest and matures in 15 years that is

(Cost ofdebt) Belton Distribution Company is issuing a $1,000par value bond that pays 7.0percent annual interest and matures in 15years that is paid semiannually. Investors are willing to pay $958for the bond. The company is in the 18percent marginal tax bracket. What is thefirm's after-tax cost of debt on thebond?

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