Compute the after-tax cost of debt for these bonds

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Mark Winford, Inc., issued a $1,000 face value bond with a 10 percent coupon rate. Interest is paid annually. After flotation costs, the company received $928 (which means flotation costs were about 72 dollars per bond) per bond. Compute the after-tax cost of debt for these bonds if the firm's marginal tax rate is 40 percent. The bonds mature in 11 years.

Reference no: EM13915364

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