Prime = 3.50% LIBOR = 1.56% John applies for a loan and is approved for a$1,500 loan at Prime + 4%. His tax rate is 30%, what is his effective cost of debt? Susan is approved for a $10,000 loan at LIBOR + 2, Her tax rate is 25%. Frank's credit risk is a bit high and his loan is approved at Prime 5. His tax rate is 35%. Ellie's credit is very strong and her bank approves her loan at Prime. Her tax rate is 35% Kristin's loan is approved at Prime + 2. Her tax rate is 28%