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Delton Distribution Company is issuing a $1,000 par value bond that pays 7.0percent annual interest and matures in15 years that is paid semiannually. Investors are
Delton Distribution Company is issuing a $1,000
par value bond that pays 7.0percent annual interest and matures in15
years that is paid semiannually. Investors are willing to pay $958
for the bond. The company is in the 18
percent marginal tax bracket. What is thefirm's after-tax cost of debt on thebond?
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