Tom's Ventures has a zero coupon bond issue outstanding that matures in thirteen years.The bonds are selling at 48 percent of par value.The company's tax rate is 34 percent.What is the company's after-tax cost of debt?
A) 3.83 percent
B) 4.11 percent
C) 4.73 percent
D) 4.80 percent
E) 5.81 percent
Correct Answer:
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