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Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds
Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 7.9 percent coupon, paid semiannually, a current maturity of 20 years, and sell for the par value, $1,000. The firm's marginal tax rate is 38 percent. What is Rollins' component after-tax cost of debt?
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