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Gibson Industries is issuing a $1,000 par value bond with an 8% semi-annual interest coupon rate and that matures in 11 years. Investors are willing to pay $972 for these bonds. Gibson is in the 34% tax bracket. What will be the after-tax cost of debt of the bond?
Paid
The act of transferring money or compensation for services rendered or goods received.
Trade Discount
A reduction from the list price granted by a seller to a buyer in the commercial marketplace, often based on volume or trade status.
Net Price
The price of a good or service after deductions such as discounts, rebates, and allowances have been taken into account.
List Price
The manufacturer's suggested retail price (MSRP) or the price at which a product is intended to be sold before any discounts or promotions.
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