A company's $1,000 face value bond with a 6% coupon rate, semi-annual payments and a maturity of 30 years is selling for $515.16. The company's federal plus state tax rate is 25%. For purposes of calculating WACC, what is the firm's after-tax component cost? ( Hint: Base your answer on the nominal rate.) Round your answer to one decimal place.

Answer rating: 100% (QA)

To calculate the firms aftertax cost of debt you need to take into account the tax shield from the i... View the full answer