Keys Printing plans to issue a $1,000 par value, 20-year

Last updated: 7/14/2022

Keys Printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 45.00%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted? Do not round your intermediate calculations. a. -0.42% b. -0.44% c. -0.30% d. -0.35% e. -0.36%