Tangshan mining is considering issuing long-term debt

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Tangshan mining is considering issuing long-term debt. The debt would have a 30 year maturity and a 12% coupon rate and make semiannual coupon payments. In order to sell the issue, the bonds must be underpriced at a discount of 2.5% of face value. The firm's tax rate is 33%. Given this information, the after tax cost of debt for Tangshan mining would be.

Reference no: EM131510278

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