Question: Can someone answer this for me Asap? 2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the
2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Western Gas \& Electric Company (WGC) can borrow funds at an interest rote of 12.50% for a period of five years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas B. Electric Company (WGC) has 5-year noncallable bonds with a face value of \$1, 000 that are outstanding. These bonds have a current market price of $1,050.76 per bond, carry a coupen rate of 10%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If wGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal piaces)? (Note: Round your YTM rate to two decimal place.) 5,88% 7,84% 6.539 5.22%
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