Anthony's Anchovies, Inc. sold a 20-year bond issue two years ago. The bond has a 5.35% annual coupon and a $1,000 face value. If the current market price of the bond is $751.64 and the tax rate is 34%, what is the after-tax cost of debt?
A) 4.2%
B) 4.4%
C) 8.0%
D) 6.6%
E) 5.3%
Correct Answer:
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