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Problem:

A company is contemplating a new investment to be financed 33 percent of debt.The firm could sell a new $1,000 par value bomd at net price of $920.The coupon interest is 9 percent and the bonds mature in 11 years.If the company is in a after tax bracket of 38 percent,

Required:

Question: What is the after tax cost of capital?

Note: Please provide equation and explain comprehensively and give step by step solution.

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Category:- Basic Finance
Reference No.:- M91148494

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