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Tobin's Barbeque has a bank loan at 10% interest and an after-tax cost of debt of 6%. What will the after-tax cost of debt be

Tobin's Barbeque has a bank loan at 10% interest and an after-tax cost of debt of 6%. What will the after-tax cost of debt be when the loan is due if a new loan is taken out yielding 14%.

Multiple Choice

8.40%

13.45%

5.85%

None of these options are true.

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