2. An overview of a firm's cost of debt The after tax cost of debt is the interest rate that a firm pays on any new debt financing Water and Power Company (WPC) can borrow funds at an interest rate of 12,50% for a period of eight years. Its marginal federal plus-state tax rate is 25% WPC's after-tax cost of debt is 9.38% rounded to two decimal places) 12 5096 At the present time, Water and Power (WPC) has 10 year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,279.38% Ind, carry a coupon rate of 11%, and distribute annual coupon payments. The company incursa federal-plus-state tax rate of 25%.11 to issue new debt, what would be a reasonable estimate for its after tax cost of debt (rounded to two 7.97% decimal places)? (Note: Round your two decimal place.) 10.329 5.279 6.06% 6.32% @ 4.74% At the present time, Water and Power Company (WPC) has 10 year noncaltable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,278.41 per bond, carry a coupon rate of 11%, and distribute annual coupon payments. The company incursa federal-plus state tax rate of 259, 11 WPC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt crounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 5:27 6.06% 6.32% 4.74%