The YTM on Apple bond is 3%. The tax rate is 21%. What is the after-tax cost of debt? Select one: a. 2.50 b. 3% C. 2.37% d. 2.75%

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.5P
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The YTM on Apple bond is 3%. The tax rate is 21%. What is the after-tax cost of debt?
Select one:
a. 2.50
O b.
3%
С.
2.37%
O d. 2.75%
Transcribed Image Text:The YTM on Apple bond is 3%. The tax rate is 21%. What is the after-tax cost of debt? Select one: a. 2.50 O b. 3% С. 2.37% O d. 2.75%
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