A company that makes several different types of skateboards, Jennings Outdoors incurred interest expenses of $1,200,000 per

Question:

A company that makes several different types of skateboards, Jennings Outdoors incurred interest expenses of $1,200,000 per year from various types of debt financing. The company borrowed $19,000,000 in year 0 and repaid the principal of the loans in year 15 in a lump-sum payment of $20,000,000. If the company's effective tax rate is 29%, what was the company's cost of debt capital?

(a) Before taxes

(b) After taxes?

Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking...