If a Corporation Pays a Tax Rate of 21 Percent,the

Multiple Choice

If a corporation pays a tax rate of 21 percent,the after-tax cost of debt for a 10-year,8 percent,$1,000 par value bond selling at $1,150 is ________.

A) 4.71 percent
B) 3.58 percent
C) 1.25 percent
D) 6.32 percent