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Costa Inc. is a Colombia coffee company. You have computed a synthetic rating of BBB...

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Accounting

Costa Inc. is a Colombia coffee company. You have computed a synthetic rating of BBB (with a default spread of 3%) for the company. The US treasury bond rate is 3%, the Colombian Government US $ bond rate is 5.4% and the Colombian Government Peso bond rate is 6.5%. What is the US$ pre-tax cost of debt for Costa? Select one: a. 6.5% b. 3.00% c. 4.5% d. 5.0% e. 8.4%

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