Problem:
A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 12.7% that is paid semi annually. The bond is currently selling for a price of $1,128 and will mature in 10 years. The firm's tax rate is 34%
Required:
Question: What is the after-tax cost of debt from the is what percent?
Note: Please show how to work it out.