Kenny Electric Company's noncallable bonds were issued several years ago and now have 20 years to maturity. These bonds have a 9.44% annual coupon, paid semiannually, sells at a price of $1,070.00, and has a par value of $1,000. If the firm's tax rate is 35%, what is the component cost of debt for use in the WACC calculation? Note: Do not round intermediate calculations. Group of answer choices 5.20% 5.32% 5.66% 5.60% 5.37%
Kenny Electric Company's noncallable bonds were issued several years ago and now have 20 years to maturity. These bonds have a 9.44% annual coupon, paid semiannually, sells at a price of $1,070.00, and has a par value of $1,000. If the firm's tax rate is 35%, what is the component cost of debt for use in the WACC calculation? Note: Do not round intermediate calculations. Group of answer choices 5.20% 5.32% 5.66% 5.60% 5.37%
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 19P
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Kenny Electric Company's noncallable bonds were issued several years ago and now have 20 years to maturity. These bonds have a 9.44% annual coupon, paid semiannually, sells at a price of $1,070.00, and has a par value of $1,000. If the firm's tax rate is 35%, what is the component cost of debt for use in the WACC calculation? Note: Do not round intermediate calculations.
Group of answer choices
5.20%
5.32%
5.66%
5.60%
5.37%
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