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M http:// mheducation.com/hmtpr ive person Admin Console e lamericansignature01]8B.. Agent Desktop (american PSuggested sees O Cast FINANCE 13 Homework rev Question #1 (of 3) 2.00 points Problem 13-1 Cost of Debt (LO2) Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of 4%, paid annually Today, the debt is selling at $1,070. the firm's tax bracket is 40%. what is aner-tax cost of debt? Do not round intermediate calculations. Round your answer to 2 decimal places After-tax cost of debt l

Explanation / Answer

Yield to Maturity is 3.49%.

AFter Tax Cost of Debt = 3.49*(1 - 40%) = 2.09%

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