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You know that the after-tax cost of debt capital for Blossom is 12.6 percent. Assume that the firm has only one issue of five-year bonds

You know that the after-tax cost of debt capital for Blossom is 12.6 percent. Assume that the firm has only one issue of five-year bonds outstanding. The bonds make semiannual coupon payments and the marginal tax rate is 30 percent.

Pre tax cost of debit capital is 18%

What is the current price of the bonds if the coupon rate on those bonds is 18 percent?

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