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Why is the correct answer 2.92%? What is the after-tax cost of debt associated with an existing bond that matures in 9 years, has a
Why is the correct answer 2.92%?
What is the after-tax cost of debt associated with an existing bond that matures in 9 years, has a face value of $1000, a coupon rate of 8 percent payable twice a year and a market value of $1150 ? Use a 40 percent income tax rate. Enter your answer as a percentage, rounded to the nearest hundredth of a percent (Ex: if your answer is 1.234%, enter 1.23 in the box below). Answer: 2.92Step by Step Solution
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