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Which of the following companies has the lowest after tax cost of debt. Company Market Cost of Debt Tax Bracket 10% 0.35 9% 0

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Answer #1

Ans Company A

Company Market Cost of Debt Tax Bracket After Tax Cost = Market Cost of Debt * (1 - Tax Bracket)
A 10% 0.35 6.50%
B 9% 0.2 7.20%
C 12% 0.28 8.64%
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