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Business, 09.12.2021 04:10 carminamtzb3725

At the present time, Andalusian Limited (AL) has 10-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,495.56 per bond, carry a coupon rate of 10%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 45%. If AL wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)

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At the present time, Andalusian Limited (AL) has 10-year noncallable bonds with a face value of $1,0...
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