Question: Wilson Corp. has two bond issues outstanding. The first has a yield to maturity of 5% and a coupon rate of 6%. It has a

Wilson Corp. has two bond issues outstanding. The first has a

Wilson Corp. has two bond issues outstanding. The first has a yield to maturity of 5% and a coupon rate of 6%. It has a book value of $50 million and trades at 110% of par. The second has a yield to maturity of 2% and a coupon rate of 7%. It has a book value of $50 million and trades at 120% of par. What is your best estimate of the before tax cost of debt? Use the best method to calculate the weights. 3. 43% 4. 70% 5.00% 6. 50% 7.52% 6.52% 3.43% O 5.00% O 3.70% 6.50%

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