Find out firm after-tax component cost of debt, Finance Basics

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Find out firm after-tax component cost of debt

Problem:

A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 25 years sells at a price of $570.93. The company's federal-plus-state tax rate is 30%.

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Question: What is the firm's after-tax component cost of debt for purposes of calculating the WACC?

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Finance Basics: Find out firm after-tax component cost of debt

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Finance Basics: Find out firm after-tax component cost of debt

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