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Business, 15.11.2019 02:31 lagarde

Cost of debt for which capital component must you make a tax adjustment when calculating the weighted average cost of capital (wacc) for a firm? preferred stock debt equity bedrick co. can borrow at an interest rate of 12.5% for a period of six years. its marginal federal-plus-state tax rate is 35%. what is bedrick's after-tax cost of debt? bedrick co. has outstanding 10-year noncallable bonds with a face value of $1,000. these bonds have a current market price of $1,092.79 and an annual coupon rate of 11%. the company faces a tax rate of 35%. if the company wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt? 7.43% 6.19% 5.57% 7.12%

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