What component cost of debt

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To help finance a major expansion, Miami Development, Inc. sold a noncallable bond several years ago that now has 10 years to maturity. This bond has a 9.50% annual coupon, paid semiannually, it sells at a price of $1,175, and it has a par value of $1,000. MDI's marginal tax rate is 38.00% and new bonds have 3% flotation costs. What component cost of debt should be used in the WACC calculation? Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.13456 or 13.456% then enter as 13.46 in the answer box.

Reference no: EM132504612

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