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Cost of debt the zephyr corporation is contemplating a new

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(Cost of debt) The Zephyr Corporation is contemplating a new investment to be financed 33 percent from debt. The firm could sell new S1,000 par value bonds at a net price of $945. The coupon interest rate is 12 percent, and the bonds would mature in 15 years. If the company is in a 34 percent tax bracket, what is the after-tax cost of capital to Zephyr for bonds?

Reference no: EM13479937

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