Problemross inc has issued a bond the bond has a 12 coupon, Ask an Expert

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Problem:

Ross Inc. has issued a bond. The bond has a 12% coupon, paid semiannually, a current maturity of 20 years, and sell for $1,171.59. The firm's marginal tax rate is 40%.

Required:

Question: What's the firm's after-tax component cost of debt?

Note: Explain all steps comprehensively.

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