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David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security: SONY BOND Par Value $1000

David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security:

SONY BOND

Par Value $1000 Coupon Interest Rate 6% Tax bracket 20%

Cost $ 930 Years to maturity 10

Answer the following questions.

a. calculate the before-tax cost of the Sony bond.

b. Calculate the after-tax cost of the Sony bond given David's tax bracket.

In order to get full points you must answer first and show your work. Thanks!!

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