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QRM Inc. has a marginal tax rate of 35%. It can issue 15-year bonds with an annual coupon rate of 7.50% and a par value

QRM Inc. has a marginal tax rate of 35%. It can issue 15-year bonds with an annual coupon rate of 7.50% and a par value of $1,000. New bonds will net the company $986 in proceeds.

Determine the appropriate after-tax cost of debt for the firm to use in its capital budgeting analysis?

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