What is the after-tax cost of debt for a firm in the 30 tax, Financial Management

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What is the after-tax cost of debt for a firm in the 30 tax

1. A decrease in a firm's financial leverage will:

A. Increase the operating risk of the firm.

B. Decrease the value of the firm in a non-MM world.

C. Decrease the WACC.

D. Reduce the variability in earnings per share.

2. What is the after-tax cost of debt for a firm in the 30% tax bracket that pays 12% on its debt?

A. 5.25%

B. 8.40%

C. 9.75%

D. 12.17%

E. 20.25%

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Financial Management: What is the after-tax cost of debt for a firm in the 30 tax

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