$6$

$1$ point

Suppose you are looking at a company called Volkswagen AG$.$ Volkswagen has a target capital structure of debt $w_d=60\%,$ preferred stock $w_p=10\%,$ and common equity $w_c=30\%.$ If Volkswagen can issue new debt at an interest rate of $r_d=10\%$ and they are taxed at $T=20\%,$ then what is Volkswagen's After$-$Tax Cost of Debt or $r_d(1-T)?$

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