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Stokes Valley Inc., has a debt-equity ratio of 3. The firms weighted average cost of capital is 12 percent, and its current cost of equity

Stokes Valley Inc., has a debt-equity ratio of 3. The firms weighted average cost of capital is 12 percent, and its current cost of equity is 18 percent. Stokes Valley has no preferred stocks in its capital structure. The tax rate is 40 percent. What is the companys aftertax cost of debt?

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