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The Zephyr Corporation is contemplating a new investment to be financed 33% from debt. The firm could sell new $1,000 par value bonds at a

The Zephyr Corporation is contemplating a new investment to be financed 33% from debt. The firm could sell new $1,000 par value bonds at a net price of $960. The coupon interest rate is 9% , and the bonds would mature in 17 years. If the company is in a 30% tax bracket, what is the after-tax cost of capital to Zephyr for bonds?

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