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  3. you are analysing the cost of debt for a company.

You are analysing the cost of debt for a company. You know that the companys...

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Accounting

  1. You are analysing the cost of debt for a company. You know that the companys 14-year maturity, 10.55 per cent coupon bonds are selling at a price of $1050.24. The bonds pay interest semi-annually and have a face value of $1000. If these bonds are the only debt outstanding for the company, what is the after-tax cost of debt for this company if the corporate tax is 30 per cent?

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