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Question: Ty industries wants to issue a 20-year bond with a $1,000 face value and an 8% annual coupon. The bond can be sold to investors for $915 per bond but will incur transaction costs of $6.68 per bond. If Ty industries tax rate is 21%, what is the after-tax cost of debt financing to the firm? 6.11% 7.11% 8.11% 5.11%
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