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After tax cost of a new issued bond

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Reference no: EM131967501

A firm has a $1,000 par value bond outstanding with 30 years maturity. The bond carries an annual interest payment of $105 and is currently selling for $880 per bond. The firm is in a 40% tax bracket. The firm wants to know the after tax cost of a new issued bond is likely to be.

Reference no: EM131967501

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