alleryStart learning →Rf 5.5%, credit risk 2.5%, T = 40%. After-tax Kd?
A8%
B3.3%
C4.8%
D5.5%
Answer & Solution
Correct answer: C. 4.8%
(5.5 + 2.5) = 8% pre-tax; 8 x 0.6 = 4.8%.
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