After-tax cost of debt = Before-tax cost of debt * (1 - tax rate)
a. r = 0.09 * (1 - 0.08)
r = 0.0828
r = 8.28%
b. r = 0.09 * (1 - 0.28)
r = 0.0648
r = 6.48%
c. r = 0.09 * (1 - 0.38)
r = 0.0558
r = 5.58%
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Calculate the after-tax cost of the debt under each of the following conditions: rd of 9%,...
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