The after-tax cost of debt for a firm in the 35% tax bracket with a before-tax cost of debt of 6% is:

Name: The after-tax cost of debt for a firm in the 35% tax bracket with a before-tax cost of debt of 6% is:
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Question

Quizplus · Accepted Answer

The after-tax cost of debt can be calculated using the formula: After-tax cost of debt = Before-tax cost of debt x (1 - Tax rate). Substituting the values, we get: After-tax cost of debt = 6% x (1 - 0.35) = 3.9%. Therefore, the correct answer is (C) 3.9%.

The After-Tax Cost of Debt for a Firm in the 35