Question: You can issue 20-year $1000 bonds with a present value of $1085. The bonds pay $37.50 semi-annually and the firm is in the 40% tax

  1. You can issue 20-year $1000 bonds with a present value of $1085. The bonds pay $37.50 semi-annually and the firm is in the 40% tax bracket. What is the after tax cost of debt?

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