Question

Calculate the after-tax cost of debt under each of the following conditions: rd of 14%, tax...

  1. Calculate the after-tax cost of debt under each of the following conditions:
  1. rd of 14%, tax rate of 0%. Round your answer to two decimal places.

_%

  1. rd of 14%, tax rate of 25%. Round your answer to two decimal places.

_%

  1. rd of 14%, tax rate of 30%. Round your answer to two decimal places.

_ %

  1. LL Incorporated's currently outstanding 11% coupon bonds have a yield to maturity of 8.4%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is LL's after-tax cost of debt? Round your answer to two decimal places.

_%

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