Calculate the after-tax cost of debt for company

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Reference no: EM131519219

Company E sells $1,000,000 of bonds at their face value. There are 10-year bond, and have a stated interest rate of 8%. The flotation costs are $20,000. The applicable tax rate is 40%. Using this information, calculate the AFTER-TAX cost of debt for Company E.

Reference no: EM131519219

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