What is the after tax cost of debt

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McGill Inc. has just issued 10-year bonds that have a face value of $1,000 with a 12% coupon rate paid annually. The bonds sold for $960, but McGill Inc. had to pay $10 flotation costs as well. McGill Inc. has a 30% tax rate. What is the after tax cost of debt?

Reference no: EM132406883

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