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Key Printing plans to issue a $1,000 10-year noncallable par bond with a 8.00% annual coupon, paid semiannually. The company's marginal tax rate is 40.00%,
Key Printing plans to issue a $1,000 10-year noncallable par bond with a 8.00% annual coupon, paid semiannually. The company's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 30.00%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted? (Answer as a percent and to the nearest hundredth of a percent as in xx.xx%)
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