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Laurel, Inc., has debt outstanding with a coupon rate of 6.10% and a yield to maturity of 6.98%. Its tax rate is 21%. What
Laurel, Inc., has debt outstanding with a coupon rate of 6.10% and a yield to maturity of 6.98%. Its tax rate is 21%. What is Laurel's effective (after-tax) cost of debt? Note: Assume that the debt has annual coupons and that the firm will always be able to utilize its full interest tax shield. Laurel's effective after-tax cost of debt is %. (Round to two decimal places.)
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Fundamentals of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
12th edition
978-0133075403, 133075354, 9780133423938, 133075400, 013342393X, 978-0133075359
