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2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the before-tax cost of debt by . Water
2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the before-tax cost of debt by . Water and Power Company (WPC) can borrow funds at an interest rate of 7.30% for a period of six years. Its marginal federal-plus-state tax rate is 25%. WPCs after-tax cost of debt is (rounded to two decimal places). At the present time, Water and Power Company (WPC) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,229.24 per bond, carry a coupon rate of 10%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate
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