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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This solution examines the effect of tax rate on the 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 ...
Purchase this Solution
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