Bonds outstanding that mature

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Fashion Wear has bonds outstanding that mature in 12 years, pay interest annually, and have a coupon rate of 7.5 percent. These bonds have a face value of $1,000 and a current market price of $1,060. What is the company's aftertax cost of debt if its tax rate is 35 percent?

6.85 percent

6.50 percent

4.39 percent

5.21 percent

5.53 percent

Reference no: EM13948063

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