A company's 4% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $485.

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answerhappygod
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A company's 4% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $485.

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A company's 4% coupon rate, semiannual payment, $1,000 par value
bond that matures in 20 years sells at a price of $485.23. The
company's federal-plus-state tax rate is 25%. What is the firm's
after-tax component cost of debt for purposes of calculating the
WACC? (Hint: Base your answer on
the nominal rate.) Round your answer to one
decimal place.
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