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To calculate the after - tax cost of debt, multiply the before - tax cost of debt by . Andalusian Limited ( AL ) can
To calculate the aftertax cost of debt, multiply the beforetax cost of debt by
Andalusian Limited AL can borrow funds at an interest rate of for a period of seven years. Its marginal federalplusstate tax rate is ALs aftertax cost of debt is rounded to two decimal places
At the present time, Andalusian Limited AL has year noncallable bonds with a face value of $ that are outstanding. These bonds have a current market price of $ per bond, carry a coupon rate of and distribute annual coupon payments. The company incurs a federalplusstate tax rate of If AL wants to issue new debt, what would be a reasonable estimate for its aftertax cost of debt rounded to two decimal placesNote: Round your YTM rate to two decimal place.
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