few years ago the starbucks sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% ann

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answerhappygod
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few years ago the starbucks sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% ann

Post by answerhappygod »

few years ago the starbucks sold a $1,000 par value,noncallable bond that now has 20 years to maturity and a 7.00%annual coupon that is paid semiannually. The bond now sellsfor $1,000, and the company’s tax rate is 40%. What is thecomponent cost of debt for use in the WACC calculation?
a.
3.82%
b.
3.61%
c.
4.45%
d.
5.17%
e.
4.20%
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