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10 & 11 pls Question 10 8 pts Oscorp Industries has a $20.0 million debt issue outstanding with a 5.0% coupon rate. The debt has
10 & 11 pls
Question 10 8 pts Oscorp Industries has a $20.0 million debt issue outstanding with a 5.0% coupon rate. The debt has annual coupons. The next coupon is due in one year, and the debt matures in five years. It is currently priced at 90% of par value. If Oscorp faces a 35% tax rate, what is its after-tax cost of debt? 3.25% 7.47% 5.00% 4.86% Question 11 8 pts Linksys is considering the development of a wireless home networking appliance, called HomeNet. HomeNet lab will be housed in warehouse space that the company could have otherwise rented out for $300,000 per year during years 1 through 5. The tax rate for Linksys is 30%. How does this opportunity cost affect HomeNet's incremental earnings each year for years 1 to 5? Decrease incremental earnings by $300,000 Increase incremental earnings by $220,000 Decrease incremental earnings by $210,000 No effect on incremental earnings Step by Step Solution
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