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Component cost of debt for use

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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 sellsfor $950, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation?

Reference no: EM131179585

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