Outstanding debt of Tesla Inc. trades with a yield to maturity of 8%- The tax rate of Tesla Inc. is 30%. What is the effective cost of debt of Tesla Inc.? A. 5.6% B. 7.2% C. 6.8% D. 8.0%

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 9P: Bond Yield and After-Tax Cost of Debt A companys 6% coupon rate, semiannual payment, 1,000 par value...
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What is the effective cost of debt of Tesla inc. on these financial accounting question?

Outstanding debt of Tesla Inc. trades with a yield to maturity of 8%-
The tax rate of Tesla Inc. is 30%. What is the effective cost of debt
of Tesla Inc.?
A. 5.6%
B. 7.2%
C. 6.8%
D. 8.0%
Transcribed Image Text:Outstanding debt of Tesla Inc. trades with a yield to maturity of 8%- The tax rate of Tesla Inc. is 30%. What is the effective cost of debt of Tesla Inc.? A. 5.6% B. 7.2% C. 6.8% D. 8.0%
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