The outstanding bonds of Tech Express are priced at $989 and mature in 8 years. These bonds have a percent coupon and pay interest annually. The firm's tax rate is 39 percent. What is the firm's aftertax cost of debt?

a. 3.35 percent

b. 3.01 percent

c.3.77 percent

d.3.22 percent

1. The outstanding bonds of Tech Express are priced at $989 and mature in 8 years. These bonds have a 6 percent coupon and pay interest annually. The firm's tax rate is 39 percent. What is the firm's aftertax cost of debt?

a3.35 percent

b. 3.01 percent

c.3.77 percent

d. 3.22 percent

2. Kelso's has a debt-equity ratio of 0.55 and a tax rate of 35 percent. The firm does not issue preferred stock. The cost of equity is 14.5 percent and the beforetax cost of debt is 7.3846 percent. What is the weighted average cost of capital ?