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WSJ Corp issued debt with a coupon rate of 8%, 5 years maturity, and selling...

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Question

Finance

  1. WSJ Corp issued debt with a coupon rate of 8%, 5 years maturity, and selling price of $1,000. What is the after-tax cost of debt if the marginal tax rate of the firm is 40%?

    A.

    4.8%
    B.

    4.0%
    C.

    3.2%
    D.

    3.8%

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