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Posted on Jul 28, 2024

The coupon rate on an issue of debt is 10%. The yield to maturity on this issue is 12%. The corporate tax rate is 30%.

The coupon rate on an issue of debt is 10%. The yield to maturity on this issue is 12%. The corporate tax rate is 30%. What would be the approximate after-tax cost of debt for a new issue of bonds

a 7.5%

b 7%

c 8.1%

d 8.4%

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