question archive The coupon rate on a debt issue is 6%
The coupon rate on a debt issue is 6%
Subject:BusinessPrice:1.87 Bought7
The coupon rate on a debt issue is 6%. If the yield to maturity on the debt is 10%. what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 35%? (Round your answer to 2 decimal places.)
5.15%
7.85%
6.50%
8.65%
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Answer:
After tax cost of debt = 10% * (1 - 35%)
= 6.50%
