What is the component cost of debt for use in the wacc


Cummins Company’s non-callable bonds were issued several years ago and now have 16 years to maturity. These bonds have a 7% 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?

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Risk Management: What is the component cost of debt for use in the wacc
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