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Mastrolia Inc. has a 9.25% semiannual bond that has 20 years to maturity. This bond currently sells at a price of $875 and has a

Mastrolia Inc. has a 9.25% semiannual bond that has 20 years to maturity. This bond currently sells at a price of $875 and has a par value of $1,000. The company's tax rate is 35%. What is the company's after-tax cost of debt?

1.

7.01%
2.

10.31%
3.

6.47%
4.

5.63%
5.

5.95%

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