What would aftertax cost of debt be

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The Goodsmith Charitable Foundation, which is tax-exempt, issued debt last year at 6 percent to help finance a new playground facility in Los Angeles. This year the cost of debt is 20 percent higher; that is, firms that paid 8 percent for debt last year will be paying 9.60 percent this year. a. If the Goodsmith Charitable Foundation borrowed money this year, what would the aftertax cost of debt be, based on their cost last year and the 20 percent increase?

Reference no: EM131551117

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