Suppose a company's capital structure includes a debt with maturity of 10 years and marginal tax rate of 40%. If the company's rating is AAA and the yield on the debt with the same similar debt rating is 5%, the company's before tax cost of debt is 5%. Calculate the after tax cost of debt

Answer rating: 100% (QA)

The aftertax cost of debt can be calculated using the formula After tax Cost of DebtBefo... View the full answer