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7.15. The annual effective risk-free interest rate is 0.04 and the debt cost of capital for a company is 0.06. The recovery rate for defaulted

7.15. The annual effective risk-free interest rate is 0.04 and the debt cost of capital for a company is 0.06. The recovery rate for defaulted bonds is 20%. Calculate the assumed annual default rate implicit in the debt cost of capital

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