Galvatron Metals has a bond outstanding with a coupon rate of 5.9 percent and semiannual payments. The bond currently sells for $1,947 and matures in 21 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt?
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![Galvatron Metals has a bond outstanding with a coupon rate of 5.9 percent and semiannual payments. The bond currently sells for $1,947 and matures in 21 years.
The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt?
Multiple Choice
2.86%
3.06%
3.89%
3.39%
4.84%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fda101011-f808-467d-b23d-f5c2e8d7cdab%2Fe0ad28db-3c1f-4e3b-bed6-5624d4f12804%2Fms8exj_processed.png&w=3840&q=75)
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Answer; Option 5 - 4.84%
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