Haverford company has a 1000 par value bond outstanding, Ask an Expert

Finance

Haverford Company has a $1,000 par value bond outstanding that now has 25 years to maturity and an 8.00% annual coupon that is paid semiannually. The bond currently sells for $900.90, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation? (After-tax cost of debt) Please show work.

a. 5.41%

b. 5.73%

c. 5.98%

d. 6.09%

e. 6.24%

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Financial Management, Finance

Category:- Financial Management
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