Tobin's Barbeque has a bank loan at 8% interest and an after-tax cost of debt of 6%. What will the after-tax cost of debt be if a new loan is taken out yielding 11%.
A) 7.52%
B) 8.25%
C) 13.33%
D) None of these options are true.

Question

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The Answer of Tobin's Barbeque has a bank loan at 8% interest and an after-tax cost of debt of 6%. What will the after-tax cost of debt be if a new loan is taken out yielding 11%.
A) 7.52%
B) 8.25%
C) 13.33%
D) None of these options are true.

Tobin's Barbeque Has a Bank Loan at 8% Interest and an After-Tax