After-tax cost of debt, Holmes believes it could issue new

After-tax cost of debt

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Reference no: EM131513779

After-tax Cost of Debt

The Holmes Company's currently outstanding bonds have a 9% coupon and a 13% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 35%, what is Holmes's after-tax cost of debt? Round your answer to two decimal places.

Reference no: EM131513779

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