The Outstanding Bonds of Tech Express Are Priced at $989

question 74

Multiple Choice

The outstanding bonds of Tech Express are priced at $989 and mature in 10 years.These bonds have a 6 percent coupon and pay interest annually.The firm's tax rate is 35 percent.What is the firm's aftertax cost of debt?

• A)3.01 percent
• B)3.22 percent
• C)3.35 percent
• D)4.00 percent
• E)4.41 percent