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A company has outstanding $660,000 of 8% bonds on which the interest is payable annually on 31 December. The debt is due for redemption at

  1. A company has outstanding $660,000 of 8% bonds on which the interest is payable annually on 31 December. The debt is due for redemption at par on 1 January 20X6. The market price of the bonds at 28 December 20X2 was $95. Ignoring any question of personal taxation, what do you estimate to be the current cost of debt?

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