Assume a Firm's Debt Is Selling at Face Value

question 25

Multiple Choice

Assume a firm's debt is selling at face value.What is the firm's cost of debt if the debt has a coupon rate of 7.5% and the tax rate is 35%?

• A) 4.88%
• B) 4.97%
• C) 5.21%
• D) 5.35%

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