The current price of Jana's 12% coupon semiannual payment, noncallable bonds with 15 years remaining in maturity is $1,153.72 with $1,000 face value. Jana does not use short term interest bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. Tax rate is 40%.
What is the market interest rate on Jana's debt and what is the component cost of this debt for WACC purposes? (WACC= Weighted Average Cost of Capital)