Foc which capital component must you make a tax adjustment when calcilating a firm's weighted average cost of copital (WACC)? Debt Preferred stock Equity Water and Power Company (WPC) can borrow funds at an interest rate of 7,30% for a period of four years. Its marginal federal-plis-state tax rate is 25\%. WPC's after-tax cost of debt is (rounded to two decimal places). At the present time, Water and Power Company (WPC) 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 federal-plus-state tax rate of 25%. If WPC 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.) 2,35% 3.53% 2.94%