Gibson Industries is issuing a $1,000 par value bond with an 8% semi-annual interest coupon rate and that matures in 11 years. Investors are willing to pay $972 for these bonds. Gibson is in the 34% tax bracket. What will be the after-tax cost of debt of the bond?

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The Answer of Gibson Industries is issuing a $1,000 par value bond with an 8% semi-annual interest coupon rate and that matures in 11 years. Investors are willing to pay $972 for these bonds. Gibson is in the 34% tax bracket. What will be the after-tax cost of debt of the bond?

Gibson Industries Is Issuing a $1,000 Par Value Bond with an 8