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What is the after-tax cost of debt

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Reference no: EM132929602

Problem - Suspect Corp. issued a bond with a maturity of 25 years and a semiannual coupon rate of 6 percent 2 years ago. The bond currently sells for 92 percent of its face value. The company's tax rate is 35 percent.

a. What is the pretax cost of debt?

b. What is the after-tax cost of debt?

Reference no: EM132929602

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