With a combined federal and state corporate tax rate of 40% and a market yield of 8% on long-term debt, the after-tax cost of debt is 3.20%.

Name: With a combined federal and state corporate tax rate of 40% and a market yield of 8% on long-term debt, the after-tax cost of debt is 3.20%.
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The after-tax cost of debt is calculated as the market yield on long-term debt multiplied by (1 - tax rate). With a tax rate of 40% and a market yield of 8%, the after-tax cost of debt is 8% * (1 - 0.40) = 4.8%.

With a Combined Federal and State Corporate Tax Rate of 40