x

Cost of debt using the approximation formulaFor the following

$1,000-par-value

bond, assuming annual interest payment and a

24%

tax rate, calculate the after-tax cost to maturity using the approximation

formula.

Life	Underwriting fee	Discount () orpremium (+)	Coupon interest rate
20 years	$40	$30	8%

The after-tax cost of financing using the approximation formula is

nothing%.

(Round to two decimal places.)

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