What would be the approximate after-tax cost of debt

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Reference no: EM132923582

Question - The coupon rate on an issue of debt is 8%. The yield to maturity on this issue is 10%. The corporate tax rate is 21%. What would be the approximate after-tax cost of debt for a new issue of bonds?

a. 2.48%

b. 3.14%

c. 7.9%

d. 5.28%

Reference no: EM132923582

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