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ANSWER!! The after-tax cost of debt Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 7.30% for a period of
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2. An overview of a firm's cost of debt The is the interest rate that a firm pays on any new debt financing. Westem Gas \& Electric Company (WGC) can borrow funds at an interest rate of 7,30\% for a period of eight years. Its marginal federal-plu5-5tate tax rate is 25%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas \& Electric Company (WGC) has 10-year noncaliable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,495,56 per bond, carry a coupon rate of 10%, and distribute annual coupon payments. The company incurs a feceral-plis-state tax rate of 25%, If wGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 3.53% 3.38% 2.35% 2.94% The after-tax cost of debt Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 7.30% for a period of eight years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is 5.48% (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 10-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,495.56 per bond, carry a coupon rate of 10%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If WGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 00 3.53% 3.38% is the interest rate that a firm pays on any new debt financing. 2.35% 2.94%
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