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The after - tax cost of debt is less than the required rate of return because a . investors consider a portion of their return
The aftertax cost of debt is less than the required rate of return because
a investors consider a portion of their return should stay with the company to allow growth.
b interest on debt can be deducted for tax purposes.
c investors understand that companies have large expenses to cover.
d interest expense is added to the cost of debt.
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