SOLUTION: Kenny Electric Company's noncallable bonds were issued several years ago and now have 20 years to maturity. These bonds have a 9.25% annual coupon, paid semiannually, sells at a pr

Question 1149511: Kenny Electric Company's noncallable bonds were issued several years ago and now have 20 years to maturity. These bonds have a 9.25% annual coupon, paid semiannually, sells at a price of $1,075, 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 calculation?

a. 4.58%

b. 5.08%

c. 5.33%

d. 4.35%

e. 4.83%

Answer by ikleyn(52781) (Show Source): You can put this solution on YOUR website!
.

Let me explain you something.

There is the area of Math problems and there is the area of Finance problems.

There is some intersection of these two areas.

While the problem is in Math, we can help.

Even if the problem is in intersection area, we still can help.

But THIS problem is strictly in the Finance area, highly specialized.

In this area we CAN NOT help at this forum.

So, you simply waste your time, posting this problem and such problems to this forum.

Find another, more appropriate site for your needs.

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