After-tax cost of debt, The XYZ Inc.'s currently

After-tax cost of debt

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The XYZ Inc.'s currently outstanding bonds have a 10 percent yield to maturity and an 8 percent coupon. It can issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40 percent, what is XYZ's after-tax cost of debt?

Reference no: EM13720797

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