Trying to determine its cost of debt

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A company is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 96% of the face value. The issue makes semi-annual payments and has a coupon rate of 7%annually. What is the pre tax cost of debt? Tax rate of 40%, what is the after-tax cost of debt?

Reference no: EM13765299

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