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Holmes outstanding bonds have an 8.5% annual coupon payment and will mature in 10 years. The bonds are currently selling for $957.50 If the company
Holmes outstanding bonds have an 8.5% annual coupon payment and will mature in 10 years. The
bonds are currently selling for $957.50 If the company can issue new bonds at par with similar YIM,
what is Holmes before-tax cost of debt? If Holmes marginal tax rate is 25%, what is Holmes' after-
tax cost of debt?
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