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Free Fallen is a not for profit business in Los Angeles County and entered into a term loan with a local bank on Mulhulland Drive.

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Free Fallen is a not for profit business in Los Angeles County and entered into a term loan with a local bank on Mulhulland Drive. Free Fallen has no other debt and is considered a good credit risk. Mr. Petty, the bank manager, informed Free Fallen that it only offered one rate as it only deals with exclusive clientele, The rate applies to for-profit as well as not-for-profit businesses and the interest rate on the term loan was set at 15%. Free Fallen's new controller is trying to determine the after-tax cost of this debt and has asked for your help. Determine Free Fallen's after-tax cost of debt. O Tax rates assumed to be 35% so 9.75% O The stated rate in the loan agreement or 15% O Neither a orb

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