Easy Slider Inc.sold a 15 year $1,000 face value bond with a 10 percent coupon rate.Interest is paid annually.After flotation costs, Easy Slider received $928 per bond.Compute the after-tax cost of debt for these bonds if the firm's marginal tax rate is 40 percent.
A) 6.0%
B) 7.2%
C) 7.8%
D) 6.6%
Correct Answer:
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