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What would be a reasonable estimate for its after-tax cost

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Reference no: EM132028279

Three Waters Company has outstanding 5-year noncallable bonds with a face value of $1,000. These bonds have a current market price of $1,050.76 and an annual coupon rate of 10%.

The company faces a tax rate of 30%. If the company wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt?

Reference no: EM132028279

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