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Firm after-tax cost of debt on the bond

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Delton Distribution Company is issuing a $1,000 par value bond that pays 7.0 percent annual interest and matures in 15 years that is paid semiannually. Investors are willing to pay $958 for the bond. The company is in the 18 percent marginal tax bracket. What is the firm's after-tax cost of debt on the bond?

Reference no: EM131152534

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