RAZR Industries issued a 25 year bond, with a coupon of 8%, making semi-annual payments and a
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Question:
RAZR Industries issued a 25 year bond, with a coupon of 8%, making semi-annual payments and a par value of $1,000. The bond currently sells for 108% of par. The company's tax rate is 21%.
1) Calculate the before tax cost of debt.
2) Calculate the after tax cost of debt.
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