Several years ago the Jakob Company sold a $1,000 par value,

Last updated: 7/14/2022

Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $875, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation? Do not round your intermediate calculations. a. 4.92% b. 4.97% c. 5.87% d. 3.78% e. 4.58%