Caterpillar Inc. currently has bonds outstanding that have the following characteristics: maturity value (M) =...
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Caterpillar Inc. currently has bonds outstanding that have the following characteristics: maturity value (M) = $1,000, coupon rate of interest (C) = 6%, years to maturity = 5, and interest is paid annually. If the bonds market value is $959, what is its before-tax and after-tax component cost of debt? Caterpillars marginal tax rate is 35 percent.
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