PVE, Inc. has $15 million of debt outstanding with a coupon rate of 9%. Currently, the yield to maturity on these bonds is 7%. If the firm's tax rate is 35%, what is the after-tax cost of debt to PVE?
A) 10.76%
B) 5.85%
C) 4.55%
D) 5.4%
Correct Answer:
Verified
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