$10\mathrm{.}60$ x

$9\mathrm{.}67$ x

Question $7$

$3$ pts

Firm A plans to issue a $$1,000$ par value, $20-$year noncallable bond with a $7\mathrm{.}00\%$ annual coupon, paid semiannually. The company$/$s marginal tax rate is $40\mathrm{.}00\%,$ but Congress is considering a change in the corporate tax rate to $30\mathrm{.}00\%.$ By how much would the after tax cost of debt $($i$.$e$.,R_d^{TT}(1-T))$ used to calculate the WACC change if the new tax rate was adopted?

$0\mathrm{.}57\%$

$0705$

$0\mathrm{.}85\%$

$0\mathrm{.}77$

$0\mathrm{.}63\%$

uestion $8$

$3$ pts