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Calculate the cost of debt after taxes

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Question 1: Using the cost of debt approximation formula, determine the pre-tax cost for a bond that sells at $ 875 of its par value and that pays a coupon of $ 75 for 20 years. The flotation costs are $ 6 per bond. calculate the cost of debt after taxes if the company's tax liability is 45%. You must show the calculations to receive a score for your answer.

Reference no: EM133012426

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