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The Before-Tax Cost of Debt for a Firm, Which Has

Question 33

Multiple Choice

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) 6.0 percent
C) 7.2 percent
D) 12 percent

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