Unity Communications Company S Noncallable Bonds Were Issued Several Years Ago A

Unity communications company’s noncallable bonds were issued several years ago and now have 15 years to maturity. These bonds have a 12% annual coupon, paid semiannually, sells at a price of $1,070, and has a par value of $1,000. If the firm’s tax rate is 40%, what is the component cost of debt for use in the WACC calcularion?

5.35%, 5.58%, 5.83%, 6.62%, or 7.33%

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