The coupon rate on a debt issue is 7%. If the yield to maturity on the debt is 11%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 41%? (Round your answer to 2 decimal places.)
5.14%
7.84%
6.49%
8.64%
The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 10%. The corporate tax rate is 37%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.)
6.30%
7.75%
4.95%
8.45%
Tobin's Barbeque has a bank loan at 8% interest and an after-tax cost of debt of 6%. What will the after-tax cost of debt be when the loan is due if a new loan is taken out yielding 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
9.00%
14.05%
6.45%
None of these