Laurel, Inc., has debt outstanding with a coupon rate of 5.9 % and a yield to maturity

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Laurel, Inc., has debt outstanding with a coupon rate of 5.9 % and a yield to maturity of 6.9 %. Its tax rate is 38%. What isLaurel's effective(after-tax) cost ofdebt? NOTE: Assume that the debt has annual coupons.

Note: Assume that the firm will always be able to utilize its full interest tax shield.

The effectiveafter-tax cost of debt is____%

Posted Date: May 18, 2024 12:17 PM

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Laurel, Inc., has debt outstanding with a coupon rate of 5.9 % and a yield to maturity

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