Walgreen corporation is contemplating new investment

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The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1000 par value with a 15-year maturity at a price of $954 that carry a coupon interest rate of 12.2 percent that is paid semi annually. If the company is in a 34-percent tax bracket, what is the after-tax of capital to Walgreen for the bonds?

Reference no: EM13721499

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