154k views
1 vote
Several years ago the jakob company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. the bond currently sells for $925, and the company's tax rate is 40%. what is the component cost of debt for use in the wacc calculation?

User Mschmidt
by
7.3k points

1 Answer

3 votes
4.65% is the component cost of the debt for use in the wacc calculation
User Ryanrhee
by
7.7k points