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Component cost of debt

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20. 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 $950, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation?
4.81%
4.49%
4.31%
5.48%
5.30%

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The solution explains how to calculate the component cost of debt

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The component cost of debt is the after tax YTM. The YTM is the ...

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