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Amar Corporation pays 11.6% interest on its outstanding bonds. If its tax rate is 40%, what is its after-tax cost of debt?
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- PMF, Inc., can deduct interest expenses next year up to 30% of EBIT. This limit is equally likely to be $15 million, $21 million, or $27 million. Its corporate tax rate is 35%, and investors pay a 20% tax rate on income from equity and a 35% tax rate on interest income. What is the effective tax advantage of debt if PMF has interest expenses of $12 million this coming year? (Round to two decimalplaces.) What is the effective tax advantage of debt for interest expenses in excess of $27 million? (Ignore carryforwards) (Round to two decimalplaces.) What is the expected effective tax advantage of debt for interest expenses between $15 million and $21 million? (Ignore carryforwards) (Round to two decimalplaces.) What level of interest expense provides PMF with the greatest tax benefit? (Round to two decimalplaces.)If a corporation has an average tax rate of 30 percent, what is the approximate after cost of debt for a P1,000 par value bond selling for P1,120 that matures in 6 years and pays 12 percent interest annually? a. 8.5%b.6.6%c.12.0%d.13.2%Times Corporation, whose tax rate is 30%, has two sources of funds: long−term debt with a market value of $6,500,000 and an interest rate of 7%, 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 ________.