Which One of the Following Correctly Represents a fiRm's After-Tax

question 289

Multiple Choice

Which one of the following correctly represents a firm's after-tax cost of debt?

• A) current yield x (1 - tax rate)
• B) current yield x tax rate
• C) coupon rate x (1 - tax rate)
• D) yield to maturity x tax rate
• E) yield to maturity x (1 - tax rate)

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Definitions:

Marginal Benefits

The additional satisfaction or utility gained from consuming or producing one more unit of a good or service.

Highway Programs

Government-funded initiatives aimed at constructing, expanding, or maintaining road networks for public and commercial use.

Crime-Control Program

Initiatives designed to reduce crime and increase public safety through various means, including law enforcement, changes in policy, or community programs.

Net Benefits

The difference between the total benefits received from a decision or action and the total costs associated with it.