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Inc. sold a 10-year bond issue 3 years ago. The bond has a 6.45% annual coupon and a $1,000 face value. If the current market price of the bond is $980 and the tax rate is 30%, what is the after-tax cost of debt?

Select one:

a. 3.50%

b. 4.77%

c. 5.15%

d. 7.36%

e. 6.45%

Option 1

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