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What is the new after tax cost of debt-sader inc

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Reference no: EM132652290

Sader, Inc.'s current outstanding 7% coupon bonds have a yield to maturity of 14%. C. Sader believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 30%, what is the after-tax cost of debt?

If flotation costs are included and are 3%, what is the new after tax cost of debt?

No flotation cost:

With flotation costs:

Reference no: EM132652290

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