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KSS has $1000 par value bonds with a 5% coupon rate and coupons paid semi-annually...

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Finance

KSS has $1000 par value bonds with a 5% coupon rate and coupons paid semi-annually that mature in 25years. The bonds are selling for $1,050. KSS has an average tax rate of 30%, KSS is in the 40% marginal tax bracket. What is the after tax cost of debt?
a) 2.80%
b) 5.11%
c) 3.95%

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