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The bond currently sells for 108 percent of its face value

Shanken Corp issued a 30 year 6.2 percent semiannual bond 7 years ago. The bond currently sells for 108 percent of its face value. The company's tax rate is 35 percent.

a. What is the prax cost of debt?

b. What is the aftertax cost of debt?

c. Which is more relevant, the pretax or the aftertax cost of debt?

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Finance Basics: The bond currently sells for 108 percent of its face value

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Finance Basics: The bond currently sells for 108 percent of its face value

Reference No:- TGS02560537

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