Cost of debt For which capital component must you make a tax adjustment when calculating the weighted average cost of capital (WACC) for a firm? Equity Debt Preferred stock Bedrick Co. can borrow at an interest rate of 11.1% for a period of five years. Its marginal federal-plus-state tax rate is 30%. What is Bedrick's after-tax cost of debt? ______ Bedrick Co. has outstanding 5-year noncallable bonds with a face value of dollar 1,000. These bonds have a current market price of dollar 1,229.24, a coupon rate of 10%, and annual coupon payments. The company faces a tax rate of 30%. If the company wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt? 2.99% 3.98% 3.32% 2.66%