Company B has 70,000 bonds outstanding. Each bond has a face value of 1000, a coupon rate of 4.5%, 11 years until the bond matures, and a YTM of 6.5%. Additionally, you know that Company B has bank debt with an interest rate of 5%. When calculating WACC, what is the cost of debt for Company B?

Answer rating: 100% (QA)

To calculate the cost of debt for Company B we use the yield to maturity YTM of the bonds since they ... View the full answer