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The tax rate is at 30%. Compute for the cost of debt Consider a company with debt and equity of 20,000,000 and 50,000,000 respectively. A

The tax rate is at 30%. Compute for the cost of debt

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Consider a company with debt and equity of 20,000,000 and 50,000,000 respectively. A company enjoy a 12% interest rate for its liability. The market have a beta of 2.45, the risk free rate is at 5% while the equity premium is 4% The tax rate is at 30% Compute for the cost of debt Select one: a. 9.80% D. 6 75% c. 8 40% d. 8.35% Next page

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