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What is the cost of debt to darktree

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Reference no: EM132736939

Problem 1: Darktree Inc. has $10 million of 10% bonds outstanding. The market value of bond is $9 million. Darktree's corporate tax rate is 15%. What is the cost of debt to Darktree?

a) 8.5%
b) 9.0%
c) 9.4%
d) 10.3%

Reference no: EM132736939

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