The after-tax cost of debt

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Reference no: EM13768861

Given the following information

market value of common equity= 60 million

cost of preferred stock= 10%

market value of preferred equity=10 million

market value of debt= 30 million

total capital= 100 million

the cost of common equity is 15%

before tax cost of debt = 4%

The company pays 50% corporate taxes. What is the after-tax cost of debt?

Reference no: EM13768861

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