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What is the approximate after-tax cost of debt for packman

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Reference no: EM132741310

PackMan company has $1 000 par value bonds outstanding with nine years to maturity and are currently priced at $754.08.

Required:

Problem1 : If the bonds have a coupon rate of 7.25%, then what is the approximate after-tax cost of debt for PackMan if its company tax rate is 30%? (round to the nearest 0.5%)?

Group of answer choices

Option 1: 11.75%

Option 2: 12.095%

Option 3: 8.28%

Option 4: 7.225%

Reference no: EM132741310

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