PPT Slide
Pre-tax cost of debt: (using TVM)
P/Y = 2 N = 40
PMT = -50
FV = -1000
PV = 950
solve: I = 10.61% = kd
After-tax cost of debt:
Kd = kd (1 - T)
Kd = .1061 (1 - .34)
Kd = .07 = 7%
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