To Help Finance a Major Expansion,Delano Development Company Sold a Noncallable

question 56

Multiple Choice

To help finance a major expansion,Delano Development Company sold a noncallable bond several years ago that now has 15 years to maturity.This bond has a 10.25% annual coupon,paid semiannually,it sells at a price of $1,025,and it has a par value of $1,000.If Delano's tax rate is 40%,what component cost of debt should be used in the WACC calculation?

• A)5.11%
• B)5.37%
• C)5.66%
• D)5.96%

---

Definitions:

Navigation System

A device or software that aids in determining a position or route and guiding towards a specific destination, typically using GPS technology.

Exemplar Model

A way of thinking about concepts: All concepts in a category are examples (exemplars); together, they form the category.

Organizing Concepts

The process of categorizing ideas and information into structured systems or frameworks to enhance understanding, retention, and application.

Mentally Manipulating

The act of influencing or controlling someone's thinking or behavior through psychological means, often without their awareness.