The effective before tax cost of capital

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Reference no: EM13721826

To help fund an addition to your house, you borrow $25,000 from your bank. The conditions of your loan state that the interest rate is 9 percent compounded monthly. Assuming a tax rate of 40 percent (paid annually), determine the following:

1) The Effective before tax cost of capital?

2) The Effective after tax cost of capital?

Reference no: EM13721826

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