What is component cost of debt for use in wacc calculation, Finance Basics

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What is component cost of debt for use in wacc calculation

Problem

To help finance a major expansion, GAMA Company sold a bond with 20 years to maturity. This bond has a 7.75% annual coupon, paid semiannually, sells at a price of $1,085, and has a par value of $1,000. What is the component cost of debt for use in the WACC calculation?

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Finance Basics: What is component cost of debt for use in wacc calculation

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