How do calculate the before-tax component cost of debt

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Question 1: How do calculate the before-tax component cost of debt?

Point 1: KatyDid Clothes has a $130 million (face value) 20-year bond issue selling for 102 percent of par that carries a coupon rate of 10 percent, paid semiannually.

Question 2: What would be KatyDid's before-tax component cost of debt? (Round your answer to 2 decimal places.)

Reference no: EM132488435

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