Question: Solve the question using an easy to understand approach A bond has a coupon rate of 8% and will repay its nominal value of $100

Solve the question using an easy to understand approach

A bond has a coupon rate of 8% and will repay its nominal value of $100 when it matures after 4 years. The bond will be purchased today for $103 ex-interest and held until maturity. The current tax rate is 25%, with tax savings occurring in the same year that the interest payments arise. Calculate, to the nearest 0.1%, the post-tax cost of debt of the bond: *

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