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Question # 2 To help finance a major expansion, Comets Chemical Company sold a noncallable...

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Finance

Question # 2

To help finance a major expansion, Comets Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.50% annual coupon, paid semiannually, sells at a price of $950, and has a par value of $1,000. If the firm's tax rate is 25%, what is the component cost of debt for use in the WACC calculation? Do not round your intermediate calculations.

a. 7.56%
b. 5.04%
c. 7.73%
d. 10.09%
e. 4.24%

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