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The following is the information on debt issued by Huntington Power Co. Calculate the after-tax cost of debt for the firm. Debt: 5 percent annual

The following is the information on debt issued by Huntington Power Co. Calculate the after-tax cost of debt for the firm.

Debt: 5 percent annual coupon paid semiannually, $1,000 par value, 20 years to maturity, current market price of the bond is $1,040. Tax rate is 20%.

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