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The Rodman Companys currently outstanding bonds have a 12.3 percent coupon and a 14.9 percent yield to maturity. Rodman believes it could issue new bonds

The Rodman Companys currently outstanding bonds have a 12.3 percent coupon and a 14.9 percent yield to maturity. Rodman believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25 percent, what is Rodmans after-tax cost of debt?

a.

3.73%
b.

14.90%
c.

11.18%
d.

9.23%
e.

12.30%

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