The after tax cost of debt

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The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. the firm can sell new $1000 par value bonds with a 15 year maturity at a price of $948 that carry a coupon interest rate of 12.3 percent that is paid semiannually. If the company is in a 34 percent tax bracket, what is the after tax cost of capital to Walgreen for the bonds?

The after tax cost of debt is _% (Round to two Decimal places)

Reference no: EM13970859

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