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Galvatron Metals has a bond outstanding with a coupon rate of 6.6 percent and semiannual payments....

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Finance

Galvatron Metals has a bond outstanding with a coupon rate of6.6 percent and semiannual payments. The bond currently sells for$1,856 and matures in 22 years. The par value is $2,000 and thecompany's tax rate is 39 percent. What is the company's aftertaxcost of debt?

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4.2 Ratings (668 Votes)
Information providedPar value future value 2000Current price present value 1856Time 22 years2 44 semiannual periodsCoupon rate 662    See Answer
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Galvatron Metals has a bond outstanding with a coupon rate of6.6 percent and semiannual payments. The bond currently sells for$1,856 and matures in 22 years. The par value is $2,000 and thecompany's tax rate is 39 percent. What is the company's aftertaxcost of debt?

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