Posted by **Susan** on Saturday, November 23, 2013 at 12:09pm.

Suppose a zero-coupon bond is selling for $614.00 today. It promises to pay $1,000 in exactly 10 years with annual compounding. What is the firmâ€™s after-tax cost of debt if this is its sole debt outstanding (assuming the firm is in the 20% tax bracket)?

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