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ACC - Calculate the after tax cost of debt

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Calculate the after tax cost of debt using the following information (hint: see page 285 in text).;A company issues $2 million at 9% interest with a 15% tax rate.;What is the after-tax cost of debt?;Calculate the cost of issuing preferred stock using the same information above.;What is the preferred stock interest cost?;Using the information above, what are the advantages and disadvantages of both methods?

 

Paper#80914 | Written in 18-Jul-2015

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