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The coupon rate on an issue of debt is 10%. The yield to maturity on this issue is 10%. The corporate tax rate is 38%.

The coupon rate on an issue of debt is 10%. The yield to maturity on this issue is 10%. The corporate tax rate is 38%. What would be the approximate after-tax cost of debt for a new issue of bonds?(Round your answer to 2 decimal places.)

a. 4.85%b. 7.65%c. 8.35%d. 6.20%

which one is it?

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