A Firm Has Outstanding Debt with a Coupon Rate of 9%,nine

question 59

Multiple Choice

A firm has outstanding debt with a coupon rate of 9%,nine 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)6.3%
• C)5.8%
• D)5.9%

---

Definitions:

Euros

The official currency of 19 out of the 27 European Union countries, known collectively as the Eurozone.

Exchange Rates

The rate at which one country's currency can be exchanged for another country's currency.

British Pounds

The currency of the United Kingdom, also known as sterling.

Currency Exchange

The process of exchanging one form of currency for another, based on current exchange rates.