A company’s 6% coupon rate, semiannual payment, $1000 par value bond that matures in 25 years sells at a price of $656.95 The company’s federal-plus-state tax rate is 30%. What is the firm’s after tax component cost of debt for purposes of calculating the WACC (base answer on nominal rate. Round answer to 2 decimal places. My answer was 12.87%, but that is not correct.
