Problema firm has outstanding debt with a coupon rate of 9, Ask an Expert

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Problem:

A firm has outstanding debt with a coupon rate of 9%, ten years maturity, and a price of $1000 per $1000 face value.

Required:

Question: What is that after-tax cost of debt if the marginal tax rate of the firm is 35%.

A. 6.1%

B. 5.3%

C. 5.9%

D. 4.7%

Note: Please provide reasons to support your answer.

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Category:- Basic Finance
Reference No.:- M91163478

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