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Question 30 Wealth Inc. sold a 20-year bond issue 12 years ago. It pays an 8 percent annual coupon and has a $1,000 face value.

Question 30

Wealth Inc. sold a 20-year bond issue 12 years ago. It pays an 8 percent annual coupon and has a $1,000 face value. If the current price per bond is $893.30, what is the firm's after-tax cost of debt (assuming a tax rate of 25 percent)?

		7.5%
		none of the proposed answers
		9.5%
		8.0%
		10.0%

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