Several years ago the Pettijohn Company sold a $1,000 par value, noncallable bond that now has 15 years to maturity and a 8.00% annual coupon
Several years ago the Pettijohn Company sold a $1,000 par value, noncallable bond that now has 15 years to maturity and a 8.00% annual coupon that is paid semiannually. The bond currently sells for $950, and the companys tax rate is 25%. To issue new bonds, Pettijohn would incur 3% flotation costs. What is the component cost of debt for use in the WACC calculation?
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Authors: Judith J. Baker, R.W. Baker
4th Edition
1284029867, 978-1284029864
