WACC

It is because the loan notes have a current market value of par (nominal value) and will be redeemed at par (nominal value). If the current market value and the redemption amount are the same, then the cost of debt can be calculated as though it were irredeemable. That is very unusual in the exam - almost always the current market value and the amount on redemption will be different, and then you have no choice but to calculate the IRR. (Try it yourself with this example - pick any number of years you want and calculate the IRR and you will find that it is the same as calculating as though it is irredeemable :-) )

You are welcome :-)