Find what is the after-tax cost of debt for the firm

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Current cost of a bond:

Question 1: You are analyzing the cost of debt for a firm.You know that thefirm's 14-year maturity, 8.5 percent coupon bonds are selling at a price of $823.48. Thebonds pay interest semiannually. If these bonds are the only debt outstanding for thefirm, what is the after-tax cost of debt for this firm if the firm is in the 30 percent marginaltax rate?

Reference no: EM132498362

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