Homework Answers
Total Fair Value of Debt =35816+1800+2870+3524+1651 =45661
Before Tax Cost of Debt
=35816/45661*3.90%+1800/45661*2.90%+2870/45661*3.30%+3524/45661*5.40%+1651/45661*0.40%=3.8121%
After Tax Cost of Debt =3.8121%*(1-Tax Rate)=3.8121%*(1-30.70%)
=2.64%(Option b is correct option)
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what is the weighted average after tax cost of debt
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