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Mojo Mining has a bond outstanding that sells for $1,049 and matures in 21 years. The...

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Finance

Mojo Mining has a bond outstanding that sells for $1,049 andmatures in 21 years. The bond pays semiannual coupons and has acoupon rate of 5.78 percent. The par value is $1,000. If thecompany's tax rate is 35 percent, what is the aftertax cost ofdebt?

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4.5 Ratings (940 Votes)
Information providedPar value future value 1000Current price present value 1049Time 21 years2 42 yearsCoupon rate 5782 289Coupon    See Answer
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Mojo Mining has a bond outstanding that sells for $1,049 andmatures in 21 years. The bond pays semiannual coupons and has acoupon rate of 5.78 percent. The par value is $1,000. If thecompany's tax rate is 35 percent, what is the aftertax cost ofdebt?

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