Approximate after-tax cost of debt for a new issue of bonds

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The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 10%. The corporate tax rate is 37%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.)

4.95%

7.75%

6.30%

8.45%

Reference no: EM13950295

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