Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Question
Temple-Midland, Inc. is issuing a
$1,000
par value bond that pays
7.5
percent annual interest and matures in
15
years. Investors are willing to pay
$949
for the bond and Temple faces a tax rate of
32
percent. What is Temple's after-tax cost of debt on the bond?Question content area bottom
Part 1
The after-tax cost of debt is_____%
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