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In general the after-tax cost of debt rises when a company's bond rate increases and tax rates decline
In general the after-tax cost of debt rises when a company's bond rate increases and tax rates decline. (2 Points)
0 False
0 True
Expert Solution
Answer
So, Above statement that "In general the after tax cost of debt rises when a company's bond rate increases and tax rates decline" is true.
Explanation
As we know,
After Tax cost of Debt = Cost of Debt*(1- Tax Rate)
So, After Tax cost of Debt can rise when company's cost of debt increases or if tax rate declines.
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