Question
To help finance a major expansion, a company sold a noncallable bond several years ago that now has 15 years to maturity. This bond has
To help finance a major expansion, a company sold a noncallable bond several years ago that now has 15 years to maturity. This bond has a 5% annual coupon, paid semiannually, it sells at a price of $985, and it has a par value of $1,000. If the companys tax rate is 21%, what component cost of debt should be used in the WACC calculation?
| 4.06% | ||
| 9.41% | ||
| 5.14% | ||
| 2.57% |
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
