The before-tax cost of debt for a firm which has a marginal


1. The before-tax cost of debt for a firm, which has a marginal tax rate of 40 percent, is 12 percent. The after-tax cost of debt is ________.

a. 4.8 percent.
b. 7.2 percent.
c. 12 percent.
d. 6.0 percent. 

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Accounting Basics: The before-tax cost of debt for a firm which has a marginal
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