WC Inc Has a $10 Million (Face Value), 10-Year Bond Issue

question 62

Multiple Choice

WC Inc. has a $10 million (face value) , 10-year bond issue selling for 99 percent of par that pays an annual coupon of 9 percent. What would be WC's before-tax component cost of debt?

• A) 9.00 percent
• B) 9.10 percent
• C) 9.16 percent
• D) 18.32 percent

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