# Math Help - Cost of debt for use in WACC calculation

1. ## Cost of debt for use in WACC calculation

Several years ago the xxxxx Co. sold a $1,000 par value bond that now has 25 years to maturity and an 8.00% annual coupon that is paid quarterly . The bond currently sells for$900.90, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation?

i'm using a calculator of type HP10bII

i think that \$1,000 par value bond is the FV since that's what it's worth at the end

where does the %40 tax rate matter?
how do i set up the ecuasion?

i figured it out so nevermind, in calc. HP10bII it follows:
4p/yr
n=50 (25x4, quarterly)
pv=900.90
pmt= 20 (80/4)
fv=1000

then times that by 1-.4(tax rate) to get the answer