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The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 12%. The corporate tax rate is 40%.

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The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 12%. The corporate tax rate is 40%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.) Multiple Choice O 7.20% O O 9.35% O 5.85% 8.65%

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