# Mojo Mining has a bond outstanding that sells for $2,183 and matures in 19 years. The bond pays semiannual coupons and has a coupon rate of 7.22 percent. The par value is$2,000. If the company's tax rate is 35 percent, what is the aftertax cost of debt?

Question

Mojo Mining has a bond outstanding that sells for $2,183 and matures in 19 years. The bond pays semiannual coupons and has a coupon rate of 7.22 percent. The par value is$2,000. If the company's tax rate is 35 percent, what is the aftertax cost of debt?