A Firm Has Outstanding Debt with a Coupon Rate of 7%,seven

question 63

Multiple Choice

A firm has outstanding debt with a coupon rate of 7%,seven years maturity,and a price of $1000 per $1000 face value.What is the after-tax cost of debt if the marginal tax rate of the firm is 30%?

• A)4.9%
• B)5.2%
• C)5.5%
• D)5.9%

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Definitions:

Identifying Links

Refers to the process of recognizing and establishing connections between various elements, ideas, or data points.

Unrelated Things

Concepts or items that do not have a direct connection or relevance to one another.

Everyday Work Practices

The routine actions and behaviors employees engage in as part of their daily work life, contributing to organizational culture and productivity.

Alertness

The ability some people have to identify opportunities.