After-tax cost of debt, After-tax Cost of Debt The Holmes

After-tax cost of debt

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After-tax Cost of Debt The Holmes Company's currently outstanding bonds have a 7% coupon and a 12% 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 40%, what is Holmes's after-tax cost of debt? Round your answer to two decimal places. %

Reference no: EM131913295

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