Bellamee Company has bonds outstanding with five years to maturity and a face value of $5,299. The bonds are currently priced at their face value.

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Bellamee Company has bonds outstanding with five years to maturity and a face value of $5,299.  The bonds are currently priced at their face value.  If the bonds have a coupon rate of 25 percent, then what is Bellamee’s after-tax cost of debt financing (in percent) if the tax rate is 40 percent?

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