Bond yield and after-tax cost of debt a companys 8 coupon, Financial Management

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Bond yield and after-tax cost of debt a companys 8 coupon

Bond Yield and After-Tax Cost of Debt A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $575.74. The company's federal-plus-state tax rate is 40%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places.

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Financial Management: Bond yield and after-tax cost of debt a companys 8 coupon

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Financial Management: Bond yield and after-tax cost of debt a companys 8 coupon

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