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Red Mountain Inc. has bonds outstanding that are currently quoted at $990 per bond. The bonds mature in 11 years, have a $1,000 face value,
Red Mountain Inc. has bonds outstanding that are currently quoted at $990 per bond. The bonds mature in 11 years, have a $1,000 face value, and carry a 9 percent coupon with semi-annual payments. What is the firm's after-tax cost of debt if the applicable tax rate is 40 percent? Show calculations or calculator inputs.
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