"Two years ago, a company issued $20 million in long-term bonds at par value with a coupon rate of 9 percent. The company has decided to issue an addi- tional $20 million in bonds and expects the new issue to be priced at par value with a coupon rate of 7 percent. The company has no other debt outstanding and has a tax rate of 40 percent. To compute the company's weighted average cost of capital, the appropriate after-tax cost of debt is closest to:
A 4.2%.
B 4.8%.
C 5.4%."
"A is correct. The relevant cost is the marginal cost of debt. The before-tax marginal cost of debt can be estimated by the yield to maturity on a comparable outstanding. After adjusting for tax, the after-tax cost is 7(1 − 0.4) = 7(0.6) = 4.2%."
(Institute 82)
Institute, CFA. CFA Institute Level I 2014 Volume 4 Corporate Finance and Portfolio Management. John Wiley & Sons P&T, 2013-07-12. VitalBook file.
The citation provided is a guideline. Please check each citation for accuracy before use.

WHY   前面那一坨不算呢