Please Answer A and A. Round to 4 decimal places
Homework Answers
a) Pre-tax cost of debt is calculated as:-
=RATE(nper,pmt,pv,fv)
=RATE(5*2,6.1%/2*100,-93,100)*2
=7.8183%
b) After-tax:-
=7.82%*(1-0.4)
=4.6910%
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