Oberon Inc

question 47

Multiple Choice

Oberon Inc. has a $20 million ($1,000 face value) 10-year bond issue selling for 99 percent of par that pays an annual coupon of 7.25 percent. What would be Oberon's before-tax component cost of debt?

• A) 6.12 percent
• B) 7.02 percent
• C) 7.40 percent
• D) 8.15 percent

---

Definitions:

Non-Value-Added Time

Time spent on production or administrative activities that do not contribute to the customer's value perception of the product or service.

ISO 9000 Standards

A set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements needed to maintain an efficient quality system.

Consumer Products

Goods produced for personal use by consumers, including items like electronics, food, and clothing.

Manufacturing Cycle Efficiency (MCE)

Process (value-added) time as a percentage of throughput time.