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

Suppose that LilyMac Photography expects EBIT to be approximately $$220,000$ per year for the foreseeable future, and that it has $1,00010-$year, $9$ 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?

Answer is complete but not entirely correct.

Tax rate

$40$

$\%$