CH 11 #5 ANSWER IS NOT 3.01

Bond Yield and After-Tax Cost of Debt A company's 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $620.16. The company's federal-plus-state tax rate is 40%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places