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Suppose your firm wishes to finance a project with debt. The current price of the firm's debt is $1,100. These bonds pay an annual coupon rate of 9.5%, have a par value of the standard $1,000, and a maturity at the time of issuance of 30 years. Your firm faces a 32% tax rate. What is the after tax cost of the firm's debt (kD)?

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Financial Management, Finance

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