Calculate after-tax cost of debt

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Reference no: EM131853658

Based on the following information, calculate the after-tax cost of debt. (Enter percentages as decimals and round to 4 decimals)

Bonds

Par Value = $1,000

# of bonds issued = 311,000

Price (% of Par) = 108%

Coupon rate = 6%

Matures in 10 years

Makes semi-annual interest payments

Common Stock

Shares outstanding = 25,000,000

Price per share = $30.00

Beta = 0.88

Dividend just paid = $1.25

Other Information

Expected return on the market = 8%

Risk-free rate = 1%

Tax rate = 30%

Reference no: EM131853658

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