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What is the aftertax cost of debt

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Reference no: EM132971373

Question - A firm issued a bond with 30 years to maturity and a semiannual coupon rate of 6 percent 4 years ago. The bond currently sells for 95 percent of its face value. The company's tax rate is 35 percent.

What is the pretax cost of debt?

What is the aftertax cost of debt?

Which rate is more relevant?

Reference no: EM132971373

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