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What will be the firms best after-tax cost of debt on bond

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Reference no: EM131796489

Problem

Temple is issuing a RM1,000 par value bond that pays 8% annual interest and matures in 15 years. Investors are willing to pay RM 950 for the bond. Flotation be 11% of market value.

The company is in an 19% tax bracket. What will be the firm's best after-tax cost of debt on the bond?

Reference no: EM131796489

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