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19 December, 18:37

Galvatron Metals has a bond outstanding with a coupon rate of 5.9 percent and semiannual payments. The bond currently sells for $1,947 and matures in 21 years. The par value is $2,000 and the company's tax rate is 40 percent. What is the company's aftertax cost of debt? a. 6.08% b. 3.86% c. 3.37% d. 5.67% e. 3.65%

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  1. 19 December, 20:47
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    The correct answer is 'e - 3.65%'
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