What is the component cost of debt

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Reference no: EM13911528

Several years ago the Jakob Company sold a $1,000 par value, non callable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semi annually. The bond currently sells for $925, and the company’s tax rate is 40%. What is the component cost of debt for use in the WACC calculation?

Reference no: EM13911528

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