What is the after tax cost of debt for the company

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1. DR Choi issues a bond that pays 12% coupon rate. Suppose the price of the bond market value is 1020 and 8 years left until maturity. Given 32% of tax bracket what is the after tax cost of debt for the company ?

A. 7.75% B.8.65% C. 9.88% D.11.43%

2. Which of the following is not correct statement

A. when npv is positive the IRR is greater than cost of capital

B. NPV is IRR method come up with the same conclusion for the most of times

c. when IRR is less than the cost of capital the project is accepted

d. positive npv implies the cash inflow of the project is greater than the cash outflow of the project

3. The longer the time to maturity is the _______the interest rate risk is

a. the less

b. the identical

c. the greater

d. not enogh information

Reference no: EM131180397

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