New bonds issues at par provide similar yield to maturity

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Reference no: EM13731022

Interest rate of 10%; tax rate of 25%? Interest rate of 10%;tax rate 30%? Outstanding 10% coupons bonds have a yield to rate maturity of 14%. New bonds issues at par provide similar yield to maturity. If its margin tax rate is 35% what is the after-tax cost of debt?

Reference no: EM13731022

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