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Beckham Corporation has semiannual bonds outstanding with nine years to maturity that are currently priced...

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Question

Finance

Beckham Corporation has semiannual bonds outstanding with nine years to maturity that are currently priced at $794.08. If the bonds have a coupon rate of 7.25 percent, then what is the after-tax cost of debt for Beckham if its marginal tax rate is 35 percent? Complete the calculation using the effective annual interest rate (EAR) for the bond.

Group of answer choices

11.750%

7.277%

7.084%

12.095%

Answer & Explanation Solved by verified expert
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