Tesla motors has 12 million in outstanding bonds that have

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Tesla Motors has $12 million in outstanding bonds that have a 9% coupon bond and a yield to maturity of 7%. Tesla needs to raise capital for a new research and development project to improve its car battery. If Tesla issues new bonds at par, the bonds would have similar a yield to maturity. If its marginal tax rate is 28%, what is Tesla's after-tax cost of debt?

Reference no: EM13621522

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