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he Zephyr Corporation is contemplating a new investment to be financed 33 percent from debt. The firm could sell new $1 ,ooo par value bonds

he Zephyr Corporation is contemplating a new investment to be financed 33 percent from debt. The firm could sell new $1 ,ooo par value bonds at a net price of $925. The coupon interest rate is 12 percent, and the bonds would mature in 12 years. If the company is in a 39 percent tax bracket, what is the after-tax cost of capital to Zephyr for bonds?

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