BigCo lists $542 million in bonds payable on its balance sheet. Reading the notes, you discover that these are zero-coupon bonds with a face value of $1,000 and a time to maturity of 6 years. The market price for one of these bonds is $784.17. currently sell for The beta of BigCo's common stock is 1.16. The risk-free rate is estimated to be 3.47% and the market risk premium is assumed to be 6.84%. BigCo pays tax at an effective rate of 26%. 

What is BigCo's pre-tax cost of debt?

Answer rating: 100% (QA)

YTM Face Value Current Market Price 1 Time to Maturity 1 ... View the full answer