What is the after-tax interest rate of loan

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Reference no: EM131911692

To increase its market share, Sole Brother Inc decided to borrow a $50,000 for more advertising for its shoe retail line. The loan is to be paid in four equal annual payments with 15% interest. The loan is discounted 12 points. The first 6 points are an additional interest charge of 6% of the loan deducted immediately from what is received from the $50,000 loan. Another 6 points of $3,000 of additional interest is deducted as four $750 additional annual interest payments. What is the after-tax interest rate of this loan, if the firms combined tax rate is 40%? Please do not use excel to answer question.

Reference no: EM131911692

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