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What will be the firm''s after-tax cost of debt on the bond

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Reference no: EM131796273

Problem

Temple is issuing a RM1000 par value bond that pays 8% annual interest and matures in 15years. Investors are willing to pay Rm950 for the bond. Flotation costs will be 11% of market value. The company is in a 19% tax bracket. What will be the firm's after-tax cost of debt on the bond?

Reference no: EM131796273

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