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QUESTION
Assume that the Long-Term amount you found for Question 7 (17,495.00) represents Costco's 6% coupon rate, semi-annual payment, $1,000.
Assume that the Long-Term amount you found for Question 7 (17,495.00) represents Costco's 6% coupon rate, semi-annual payment, $1,000.00 par value bonds that mature in 30 years and sell at a price of $515.16. The company's tax rate is 40%. What is Costco's after-tax component cost of debt for purposes of calculating the WACC?
