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Compute the effective annual return

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Reference no: EM132532009

Stancorp has a $10.9 million debt issue? outstanding, with a 6.1 % coupon rate. The debt has? semi-annual coupons, with the next coupon is due in six months. The debt matures in five years. It is currently priced at 94 % of par value.

a. What is? Stancorp's pre-tax cost of? debt? Note: Compute the effective annual return.

b. If Stancorp faces a 30% tax? rate, what is its? after-tax cost of? debt?

Reference no: EM132532009

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