Question: Problem 1 1 - 3 Tax Rate ( LG 1 1 - 3 ) Suppose that LilyMac Photography expects EBIT to be approximately $ 6

Problem 11-3 Tax Rate (LG11-3)
Suppose that LilyMac Photography expects EBIT to be approximately $66,000 per year for the foreseeable future, and that it has 30010 year, 4 percent annual coupon bonds outstanding.
What would the appropriate tax rate be for use in the calculation of the debt component of LilyMac's WACC?
Answer is complete but not entirely correct.
Tax rate
55
%
Problem 11-3 Tax Rate (LG11-3) Suppose that LilyMac Photography expects EBIT

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