Coupon rate on debt


What is the WACC for a firm with equal amounts of debt and equity financing, a 17% before-tax company cost of capital, a 35% tax rate, and a 10% coupon rate on its debt that is selling at par value?

a. 10.40%

b. 14.25%

c. 15.25%

d. 16.00%

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Finance Basics: Coupon rate on debt
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