KSS has $1000 par value bonds with an 8% coupon rate and coupons paid annually that mature in 20 years. The bonds are selling for $1,100. KSS has an average tax rate of 30%. KSS is in the 40% marginal tax bracket. What is the before tax cost of debt?

• 7.05%

• 3.53%

• 4.23%

• 4.94%

Answer rating: 100% (QA)

The correct answer is 705 Note The Before Tax Cost of ... View the full answer