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Starling Capital has outstanding corporate debt paying a 10% coupon, with a current yield to maturity of 8%. If Starling's tax rate is 35%, what

Starling Capital has outstanding corporate debt paying a 10% coupon, with a current yield to maturity of 8%. If Starling's tax rate is 35%, what is the firm's effective cost of debt?

a. 5.2%

b. 6.5%

c. 10%

d. 8.5%

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