Keith Brothers's noncallable bonds were issued 10 years ago and now have 15 years to...
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Keith Brothers's noncallable bonds were issued 10 years ago and now have 15 years to maturity. These bonds have a 8% annual coupon, paid semiannually, sells at a price of $1,100, and has a par value of $1,000. If the firm's tax rate is 40%, what is the firm's component cost of debt (after-tax) for use in the WACC calculation? a) 5.08% b) 5.33% c) 4.83% d) 4.58% e) 4.15%
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