Based on the rate at which the firm can borrow and the marginal corporate tax rate, the discount rate for the lease would be 7.11%.
What would be the discount rate?
The discount rate is the after tax borrowing rate.
It can be found as:
= Borrowing rate x ( 1 - tax rate)
Solving gives:
= 9% x ( 1 - 21%)
= 7.11%
In conclusion, the discount rate is 7.11%.
Find out more on after-tax rates at https://brainly.com/question/867229.
