After-tax cost of debt


Jiminy's Cricket Farm issued a 30-year, 6 percent, semiannual bond 8 years ago. The bond currently sells for 97 percent of its face value. What is the after-tax cost of debt if the company's tax rate is 32 percent?

  • 4.00 percent
  • 4.25 percent
  • 4.70 percent
  • 5.75 percent
  • 6.25 percent

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Finance Basics: After-tax cost of debt
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