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Facebook just issued $ 1 0 0 million of 2 0 - year zero coupon bonds. These bonds are currently priced at $ 2 2

Facebook just issued $100 million of 20-year zero coupon bonds. These bonds are currently priced at $225. In addition, Facebook has $30 million of Preferred Stock with a current market price of $125 per share and an annual dividend of $10 per share. Facebook has $670 million worth of common stock and just paid a dividend of $3 per share and it is expected that the dividends will grow at 4% per year from now on. Assume the market rate is 11%, and the risk-free rate of return is 3%. Facebook has a beta of 1.5 and a federal income tax rate of 21%.
What is the after-tax cost of Facebook debt?

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