Problem $11-3$ Tax Rate $($LG$11-3)$

Suppose that LilyMac Photography expects EBIT to be approximately $$40,000$ per year for the foreseeable future, and that it

has $50010-$year, $5$ percent annual coupon bonds outstanding.

What would the appropriate tax rate be for use in the calculation of the debt component of LilyMac's WACC?

$***15\%$ is not the right answer$***$