Solved

Times Corporation,whose Tax Rate Is 40%,has Two Sources of Funds

Question 7

Multiple Choice

Times Corporation,whose tax rate is 40%,has two sources of funds: long-term debt with a market value of $6,000,000 and an interest rate of 9%,and equity capital with a market value of $18,000,000 and a cost of equity of 11%.Times Corporation's after-tax cost of debt is ________.


A) 3.40%
B) 5.40%
C) 5.00%
D) 7.40%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q3: Gas Supply Corporation uses the investment

Q4: Total assets employed is the total assets

Q5: Answer the following questions using the

Q6: Springfield Corporation,whose tax rate is 40%,has

Q9: Answer the following questions using the

Q10: To evaluate overall aggregate performance,return on investment

Q11: Interactive control system _.<br>A) ensure to adhere

Q12: The after-tax average cost of all the

Q90: In performance evaluations _.<br>A) managers should use

Q137: Intrinsic motivation comes from being given greater