Question $17$

Key Motors has a cost of equity of $11\mathrm{.}29$ percent and an unlevered cost of capital of $10\mathrm{.}4$ percent. The company has $$22,000$ in debt

that is selling at par value. The levered value of the firm is $$64,000$ and the tax rate is $21$ percent. What is the pretax cost of debt?

Excel Template.xlsx

$6\mathrm{.}73$ percent

$6\mathrm{.}59$ percent

$8\mathrm{.}92$ percent

$7\mathrm{.}82$ percent

$8\mathrm{.}25$ percent

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