The Shiloh Corporation is contemplating a new investment that it plans to finance using one-third...
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Finance
The Shiloh Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new$1,000par value bonds with a15-year maturity and a coupon interest rate of 12.1percent (with interest paid semiannually) at a price of$945.If the company is in a 34percent taxbracket, what is the after-tax cost of capital for the bonds?
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