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Show your work ACME Inc. sold a $1,000 par value, noncallable bond that now has 13 years to maturity and a 7.50% annual coupon that

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ACME Inc. sold a \$1,000 par value, noncallable bond that now has 13 years to maturity and a 7.50% annual coupon that is paid semiannually. The bond currently sells for $923, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation, in other words the after-tax cost of debt? 5.08% (B) 3.99% (C) 4.31% (D) 7.45% (E) 6.32%

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