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A Corporation Borrows $1,000,000 at 10 Percent Annual Rate of Interest

Question 149

Multiple Choice

A corporation borrows $1,000,000 at 10 percent annual rate of interest. The firm has a 40 percent tax rate. The yearly, after-tax cost of this debt is ________.


A) $40,000
B) $60,000
C) $100,000
D) $166,667

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