Homework: Ch 9 HW Save Score: 0 of 1 pt 2 of 5 (0 complete) HW Score: 0%, 0 of 5 pts P9-3 (similar to) Question Help 3 Before-tax cost of debt and after-tax cost of debt David Abbot is buying a new house, and he is taking out a 30-year mortgage. David will borrow $190,000 from a bank, and to repay the loan he will make 360 monthly payments (principal and interest) of $1,136.22 per month over the next 30 years. David can deduct interest payments on his mortgage from his taxable income, and based on his income, David is in the 30% tax bracket. a. What is the before-tax interest rate (per year) on David's loan? b. What is the after-tax interest rate that David is paying? 4