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Homework answers / question archive / ABC Corp's yield to maturity (before-tax cost of debt) = 10%
ABC Corp's yield to maturity (before-tax cost of debt) = 10%. If the tax rate of ABC is 30%, the after-tax cost of debt for ABC is: O 10% O 7% 8% 6%
After tax cost of debt = Before tax cost of debt (1 - tax)
After tax cost of debt = 0.1 (1 - 0.3)
After tax cost of debt = 0.07 or 7%
