After-tax cost of debt Personal Finance Problem Bella Wans is inlerosted in buying a new molorcycle. She has docided to borrow the money to pay the $20,000 purchase price of the bike. She is in the 25% income tax bracket she can either borrow the money at an interest rate of 6% from the motorcycle dealer, or she could take out a second mortgage on her home. That mortgage would come with an interest rate of 9%. Interest payments on the mortgage would be tax deduchible for Bella, but interest payments on the loan from the motorcycle dealer could not bo deducted on Bello's federal tax return. a. Calculate the afor-fax cost of borrowing from the motorcycle dealership b. Calculate the aftertax cost of borrowing through a second mortgage on Bella's home c. Which source of borrowing is less costly for Bella? d. Should Bella consider any other factors when deciding which loan to take out? a. The aftertax cost of borrowing from the motorcycle dealership is W. (Round to the nearest whole percentage.) Before-tax cost of debt Gronseth Drywall Systems, Inc, is in discussions with its investment bankers regarding the issuance of new bonds. The investment banker has informed the firm that different maturities will carry different coupon rates and sell at different prices. The firm must choose among soveral alternatives. In each case, the bonds will have a $1,000 par value and flotation costs will be $35 per bond. Calcutate the bofore-fax cost of financing with the following alternative (Click on the icon bere i in order to copy the contents of the data table below into a spreadsheet.) The beforo-tax cost of debt is \%. (Round to fwo decimal places.)