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?
A) 4.28%
B) 4.46%
C) 4.65%
D) 4.83%
E) 5.03%
Correct Answer:
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