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What is the after-tax cost of debt for zepplin corporation

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Problem 1: Zepplin Corporation is currently deciding on a new investment by issuing bonds. The company sells the new bonds with a face value of $ 1,000. The floatation cost for the issuance of new bonds is 5.5%. The coupon rate is 12%, and the bonds will mature in 15 years. If the corporate tax rate is 34%, what is the after-tax Cost of Debt for the Zepplin Corporation bonds?

Reference no: EM132759916

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