Question: MTD Inc. has a new bond issue that will net the firm $1,603,500. The bonds have a $1,500,000 par value, pay interest annually at a

MTD Inc. has a new bond issue that will net the firm $1,603,500. The bonds have a $1,500,000 par value, pay interest annually at a 6% coupon rate, and mature in 10 years. The firm has a marginal tax rate of 34%. The after-tax cost of the debt issue is:

Answer is 3.37%.

I need help in how this calculates to 3.37%. I need to visually see how the numbers are plugged in to arrive at the calculation of 3.37%.

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