On January 1, Year 1, Brown Co. issued bonds with a face value of $200,000, a stated rate of interest of 10%, and a 20-year term to maturity. The bonds were issued at face value. If Bluefield's tax rate is 40%, what is the after-tax cost of borrowing related to these bonds for Year 1?
A. $8,000
B. $28,000
C. $12,000
D. $20,000
Answer: C
Business
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