Financing plan for next year include sale of long-term bonds

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The McDaniel Company’s financing plans for next year include the sale of long-term bonds with a 12 percent coupon. The company believes it can sell the bonds at a price that will provide a yield to maturity of 10 percent. If the marginal tax rate is 40 percent, what is McDaniel’s after-tax cost of debt?

Reference no: EM131354077

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