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Tiny Tots has debt outstanding, currently selling for $830 per bond. It matures in 12 years,...

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Finance

Tiny Tots has debt outstanding, currently selling for $830 perbond. It matures in 12 years, pays interest annually, and has a 12%coupon rate. Par is $1000, and the?firm’s tax rate is 40?%.What isthe?after-tax cost of debt?

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Information provided Par value future value 1000 Present value 830 Time 12 years Coupon rate 12 Coupon payment 0121000 120 Tax rate    See Answer
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Tiny Tots has debt outstanding, currently selling for $830 perbond. It matures in 12 years, pays interest annually, and has a 12%coupon rate. Par is $1000, and the?firm’s tax rate is 40?%.What isthe?after-tax cost of debt?

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