Firms after-tax component cost of debt for purposes

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A company's 8% coupon rate, semi annual payment, $1,000 par value bond that matures in 20 years sells at a price of $593.17. The company's federal-plus-state tax rate is 40%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC?

(Hint: Base your answer on the nominal rate.) Round your answer to two decimal places.

Reference no: EM13721643

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