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What is the component cost of debt

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Question - To help finance a major expansion, Sorban Inc. sold a bond several years ago that now has 20 years to maturity. This bond has a 7.5% stated rate, paid semiannually, and sells at 98.5. If the firm's tax rate is 38%, what is the component cost of debt for use in the WACC calculation?

Reference no: EM132091962

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