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CFA Level 1
Corporate Finance

Calculating After-Tax Cost of Debt for XYZ Corp

Hard Cost Of Capital Cost Of Debt

XYZ Corp is evaluating its cost of capital, particularly the cost of debt. The company has issued bonds with a coupon rate of 6% that are currently selling in the market at 95% of their face value. The company is in the 30% tax bracket. Determine the after-tax cost of debt for XYZ Corp.

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