The bond presently sells for 925 and the companys tax rate

Reference no: EM13477049

Several years ago the Metalusa Inc. 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%

Reference no: EM13477049

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