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The Zephyr Corporation is contemplating a new investment to be financed 33 percent from debt. The firm could sell new $1,000 par value bonds at a net price of $970. The coupon interest rate is 13 percent, and the bonds would mature in 11 years. If the company is in a 20 percent tax bracket, what is the after-tax cost of capital to Zephyr for bonds?

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Financial Management, Finance

Category:- Financial Management
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