What is the cost of debt to j & b

Reference no: EM13300704

J & B, Inc. has $5 million of debt outstanding with a coupon rate of 12%. Currently, the yield to maturity on these bonds is 14%. If the firm's tax rate is 40%, what is the cost of debt to J & B?

A. 5.6%
B. 12.0%
C. 14.0%
D. 8.4%

Reference no: EM13300704

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