Problem:
Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $925, and the company's marginal tax rate is 40%.
Requirement:
Question: What is the after-tax cost of debt of the firm?
Note: Please show basic calculation