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A firm is expecting to grow at a constant rate of 4.25%. To do so, it will need to raise additional capital, including debt capital.

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A firm is expecting to grow at a constant rate of 4.25%. To do so, it will need to raise additional capital, including debt capital. Currently their $1,000 face value bonds that mature in ten years are selling for $865.00 and pay $80.00 in annual interest. Their combined state and federal tax rate is 25%. Calculate the firm's cost for new debt capital. Select one: O a. 7.6696 O b. 10.22% O c. 8.00% O d. 6.00%

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