The Coupon Rate on a Debt Issue Is 6

question 44

Multiple Choice

The coupon rate on a debt issue is 6%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 34%?

• A) 3.96%
• B) 4.08%
• C) 5.94%
• D) 7.92%

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