Outstanding Debt of Home Depot Trades with a Yield to Maturity

question 6

Multiple Choice

Outstanding debt of Home Depot trades with a yield to maturity of 7%. The tax rate of Home Depot is 35%. What is the effective cost of debt of Home Depot?

• A) 4.55%
• B) 5.01%
• C) 5.46%
• D) 5.69%

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Definitions:

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