A recent leveraged buyout was financed with $$50M$ : $$12M$ in equity capital, $$20M$ in unsecured debt borrowed at $7$ percent from one bank, and the remaining debt from another bank at $8\mathrm{.}5$ percent. What is the overall aftertax cost of the debt if the firm's marginal tax rate is $33$ percent?

$7\mathrm{.}71\%$

$5\mathrm{.}17\%$

$3\mathrm{.}34\%$

Current Attempt in Progress

TeleNyckel, Inc. has a beta of $1\mathrm{.}4.$ If the risk$-$free rate of return is $9$ percent and the market risk premium is $5$ percent, what is the firm's aftertax cost of equity capital if the firm's marginal tax rate is $30$ percent?

$11\mathrm{.}20\%$

$10\mathrm{.}60\%$

$16\mathrm{.}00\%$

$15\mathrm{.}14\%$