Suppose the risk-free rate Is 3.5%: on average. an AAA.rated corporate bond carries a credit spread of 0.3%. an A.rated corporate bond carries a credit spread of 1.1%. and a B-rated corporate bond corries a credit spread of 3.9%. Company XYZ's outstanding debt is rated BBB by rating agencies. What would be the cost of debt for XYZ based on prevailing market rates?

74 %

6.5 %

3.8 %

4.6 %

Answer rating: 100% (QA)

65 Explanation Cost of debt Risk free rate Credit spread Here the credit spread is provided for thre... View the full answer