What is the firm after-tax component cost of debt

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Reference no: EM132031983

1. The Regina fund's correlation with the market is .757. What percentage of the fund's movement can be explained by movements in the overall market?

a) 43.38 percent

b) 42.70 percent

c) 57.30 percent

d) 5.90 percent

e) None of the above

2. A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 25 years sells at a price of $740.78. The company's federal-plus-state tax rate is 35%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places.

Reference no: EM132031983

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