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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 (1-T) .
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 (1-T) . Perpetualcold Refrigeration Company (PRC) 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%. PRC's after-tax cost of debt is (rounded to two decimal places). 10.32% 9.38% At the present time, Perpetualcold Refrigeration bonds have a current market price of $1,050.76 federal-plus-state tax rate of 25%. If PRC wants decimal places)? (Note: Round your YTM rate t PRC) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These carry a coupon rate of 10%, and distribute annual coupon payments. The company incurs a ew debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two hal place.) 8.91% 12.50% 6.53% 7.51% 5.22% 5.88% Grade It Now Save & Continue Continue without saving
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