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What is the after-tax cost of debt

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Geo Company can sell long-term bonds with a face value of $1,000, a 6% coupon rate, 13 years remaining until maturity. The bonds will be sold at a price of $1,200. If it pays interest semiannually and the bond flotation costs are 2.50% of the selling price, what is the after-tax cost of debt?

The company's tax rate is 40%.

Reference no: EM132818089

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