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Ex 5. Company E has a EUR 60,000 loan with a 4% interest rate, another EUR 20,000 loan with 2,5% interest rate and pays a

Ex 5. Company E has a EUR 60,000 loan with a 4% interest rate, another EUR 20,000 loan with 2,5% interest rate and pays a 1% coupon on a bond with a nominal of EUR 100,000. The company pays a 30% corporate tax rate. Interest on the 3 debt instruments are annual.

Calculate the effective interest rate and the cost of debt for the company after tax

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