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Business, 01.08.2020 03:01 MaeWolfe

J&R Renovation, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 20 years to maturity that is quoted at 107 % of face value. The issue makes semi-annual payments and has a coupon rate of 9 % annually. A. What is the company's pretax cost of debt?
B. If the tax rate is 35 %, what is the aftertax cost of debt?

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