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Simple Foods has a zero coupon bond issue outstanding that matures in nine years. The bonds are selling at 42 percent of par value. What
Simple Foods has a zero coupon bond issue outstanding that matures in nine years. The bonds are selling at 42 percent of par value. What is the company's after tax cost of debt if the tax rate is 38 percent? (Use semiannual compounding.)
A. 5.48%
B. 5.73%
C. 6.12%
D. 7.73%
E. 9.88%
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