Question: Five years ago, Company Z sold a noncallable 20-year bond that now has 15 years to maturity with a 7% coupon that Company Z pays

Five years ago, Company Z sold a noncallable 20-year bond that now has 15 years to maturity with a 7% coupon that Company Z pays out quarterly(i.e., 4 times a year). The bond is currently quoted at 92.5, and the company's tax rate is 40%. What is the after-tax cost of debt that Company Z would use in their WACC, assuming this is Company Zs only debt issue?

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