Question
Big Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, sells at
Big Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, sells at a price of $1,075, and has a par value of $1,000. If the firm's tax rate is 40%, what is the component cost of debt for use in the WACC calculation?
| 4.35% |
| 4.58% |
| 4.83% |
| 5.08% |
| 5.33% |
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A First Course in Quantitative Finance
Authors: Thomas Mazzoni
1st edition
9781108411431, 978-1108419574
