Keys printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon,

Question:

Keys printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 30.00%. By how much would the component used to calculate the WACC change if the new tax rate was adopted?
a. 0.57%
b. 0i.63%
c. 0.70%
d. 0.77%
e. 0.85%

Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking...