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Sheman is a small car detailing company. They currently have 800000 zero coupon bonds outstanding, each with a face value of $2,000. The bonds have

Sheman is a small car detailing company. They currently have 800000 zero coupon bonds outstanding, each with a face value of $2,000. The bonds have a

maturity of 8 years and they are traded in the market at 87% of par. If Shemans tax rate is 42%, what is their after-tax cost of debt capital?

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