Cost of debt for which capital component must you make a tax adjustment when calculating the weighted average cost of capital (wacc) for a firm? preferred stock debt equity bedrick co. can borrow at an interest rate of 12.5% for a period of six years. its marginal federal-plus-state tax rate is 35%. what is bedrick's after-tax cost of debt? bedrick co. has outstanding 10-year noncallable bonds with a face value of $1,000. these bonds have a current market price of $1,092.79 and an annual coupon rate of 11%. the company faces a tax rate of 35%. if the company wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt? 7.43% 6.19% 5.57% 7.12%

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.