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Vineyard Wines issued 15-year bonds, three years ago. The bonds have an annual 6.75 percent coupon rate, paying coupons semiannually. Currently, these bonds are selling
Vineyard Wines issued 15-year bonds, three years ago. The bonds have an annual 6.75 percent coupon rate, paying coupons semiannually. Currently, these bonds are selling at 97.8 percent of face value resulting on a yield to maturity of 7.024 percent. What is the after-tax cost of debt if the tax rate is 34 percent?
a. 2.318%
b. 3.512%
c. 4.636%
d. 5.230%
e. 7.024%
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