Default risk premium on aa rated bonds are 3 and bbb- rated


Default risk premium on AA+ rated bonds are 3% and BBB- rated bonds are 6%. The marginal tax rate for both companies is 30%. What is the after tax cost of debt for GE and Alstom if the risk free rate (10 year US Treasury rate) is 2.5% ?

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Financial Management: Default risk premium on aa rated bonds are 3 and bbb- rated
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