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Five J Builders is trying to determine its cost of debt. It currently has debt issue outstanding that matures in 21 years. The price of
Five J Builders is trying to determine its cost of debt. It currently has debt issue outstanding that matures in 21 years. The price of the bonds when issued 4 years ago was 101% of par. However, the current price of the bond is 100% of par. The coupon is 5%. If Five J has a marginal tax rate of 30%, what is its pre-tax and after tax cost of debt?
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