Problems Aftertax cost of debt Aftertax cost of debt a. b. 1. Telecom Systems can issue debt yielding 8 percent. The company is in a 35 per: cent bracket. What is its aftertax cost of debt? 2. Calculate the aftertax cost of debt under each of the following conditions. Yield Corporate Tax Rato 6.0% 16% 12.6 35 9.4 24 3. The Goodsmith Charitable Foundation, which is tax-exempt, issued debt last yeu at 8 percent to help finance a new playground facility in Los Angeles. This year the cost of debt is 20 percent higher, that is, firms that paid 10 percent for debe last year will be paying 12 percent this year. a. If the Goodsmith Charitable Foundation borrowed money this year, what would the aftertax cost of debt be, based on their cost last year and the 20 percent increase? Aftertax cost of debt