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What is the company aftertax cost of debt

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Reference no: EM133010428

Problem 1: PWCV, Inc. has bonds outstanding that mature in 6 years, pay interest annually, and have a coupon rate of 4.8 percent. These bonds have a face value of $1,000 and a current market price of $1,047.52. What is the company's aftertax cost of debt if its tax rate is 18 percent?

Group of answer choices

Option 1: 3.2%

Option 2: 3.9%

Option 3: 4.1%

Option 4: 4.8%

Reference no: EM133010428

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