What is the company pre-tax cost of debt

Reference no: EM13263700

The Bet-r-Bilt Company has a 5-year bond outstanding with a 4.25 percent coupon. Interest payments are paid semi-annually. The face amount of the bond is $1,000. This bond is currently selling for 92 percent of its face value. What is the company's pre-tax cost of debt?

8.6 percent
10.6 percent
2.7 percent
6.1 percent
4.3 percent

Reference no: EM13263700

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