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Megan's Designs has a bond issue outstanding that matures in 10 years. The bonds pay interest semi-annually, Currently, the bonds are quoted at 101.7 percent

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Megan's Designs has a bond issue outstanding that matures in 10 years. The bonds pay interest semi-annually, Currently, the bonds are quoted at 101.7 percent of face value and carry a 12 percent coupon. What is the firm's aftertax cost of debt if the tax rate is 21 percent? 9.87% 9.34% 9.25% 10.40%

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