St. Claire Medical Supply has 8.5 percent semiannual coupon bonds outstanding with a $1,000 face value that sell for $950. The bonds have 10 years to maturity, but can be called in 5 years at a call price of $1,085. St. Claire's tax rate is 40 percent. What is St. Claire's after-tax cost of debt, if interest rates remain at their current level?

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The Answer of St. Claire Medical Supply has 8.5 percent semiannual coupon bonds outstanding with a $1,000 face value that sell for $950. The bonds have 10 years to maturity, but can be called in 5 years at a call price of $1,085. St. Claire's tax rate is 40 percent. What is St. Claire's after-tax cost of debt, if interest rates remain at their current level?

St Claire Medical Supply Has 8