Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent...

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Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 6.8 percent coupon, paid semiannually, a current maturity of 20 years, and sell for the par value, $1,000. The firm's marginal tax rate is 33 percent. What is Rollins' component after-tax cost of debt? Express your answer in percentage (without the % sign) and round it to two decimal places. Your Answer: Answer Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 6.8 percent coupon, paid semiannually, a current maturity of 20 years, and sell for the par value, $1,000. The firm's marginal tax rate is 33 percent. What is Rollins' component after-tax cost of debt? Express your answer in percentage (without the % sign) and round it to two decimal places. Your Answer: Answer

Answer rating: 100% (QA)

To calculate Rollins Corporations aftertax cost of debt we need to first determine the yield ... View the full answer