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Firm after-tax component cost of debt-holmes company

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Holmes company's currently outstanding bonds have an 8% coupon rate, semiannual payment, $1,000 par value and maturity of 20 years. It currently sells at $656.16. The company's federal-plus-state tax rate is 40%. What is the firm's after-tax component cost of debt for purpose of calculating the WACC?

Reference no: EM132660407

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