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Fin3227 Limited has outstanding debt in the form of semi-annual coupon-paying bonds. The bonds have 4...

Fin3227 Limited has outstanding debt in the form of semi-annual coupon-paying bonds. The bonds have 4 years left until maturity, a 9% coupon rate and currently trade at $1,065. Fin3227’s tax rate is 32%. What is the company’s effective cost of debt?

D. 4.83%

C. 7.10%

A. 6.52%

B. 6.55%
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ANSWER : D : 4.83%

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