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Compute the effective annual return

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Stancorp has a $13.1 million debt issue? outstanding, with a 5.8% 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. Additionally, show how CPN is calculated.

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

Reference no: EM133072887

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