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A firm has 1 bond issue outstanding with a par value of $1,000 and a coupon rate of 9.50%. The bond matures in 7 years.

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A firm has 1 bond issue outstanding with a par value of $1,000 and a coupon rate of 9.50%. The bond matures in 7 years. The firm's marginal tax rate is 21%. What is the firm's cost of debt if the bond's current price is $1,065 ? Assume coupon payments are made semi-annually.2 Multiple Choice 8.26% 3.26% 4.13% 6.52%

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