To find the cost of debt, we need to put the following values in the financial calculator:
N = 15;
PV = -952;
PMT = 8.5%*1000 = 85;
FV = 1000;
Press CPT, then I/Y, which gives us 9.10
So, Before-tax cost of debt = 9.10%
After-tax cost of debt = Before-tax cost of debt * (1 - t) = 9.10% * (1 - 0.32) = 6.19%
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