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A firm sold a noncallable bond several years ago and now has 20 years maturity. This bond is 9.25 annual coupon paid semiannually. Sells at

A firm sold a noncallable bond several years ago and now has 20 years maturity. This bond is 9.25 annual coupon paid semiannually. Sells at a price of $1075 has a par value of $1000. If the firms tax rate is 40% what is the component cost of debt after tax for use of WACC calculation

a 5.08%

b 6.81%,

c 5.9%

D 4.57%

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