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    After tax cost of debt

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    For a firm paying 7% for a new debt, the higher the firm's tax rate

    A. The higher the after-tax cost of debt
    B. The lower the after tax cost of debt
    C. After tax cost is unchanged
    D. Not enough information to judge

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    https://brainmass.com/business/interest-rates/after-tax-cost-debt-example-problem-275190

    Solution Preview

    For a firm paying 7% for a new debt, the higher the firm's tax rate

    A. The higher the after-tax cost of debt
    B. The lower the after tax cost of debt
    C. After tax cost is unchanged
    D. Not enough ...

    Solution Summary

    This solution examines the effect of tax rate on the after tax cost of debt.

    $2.19

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