Your firm has a target debt ratio of 30%. Cost of debt ( ) is 6%. The risk-free rate is 3% and the expected market risk premium is 6%. Your firm's unlevered (asset) beta is 1. What is the appropriate rate to discount the interest tax shields associated with your debt?
a) 3.0%
b) 3.6%
c) 6.0%
d) 9.0%
