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A food ingredient company has 2 0 yeas, 1 0 0 0 $ par bonds outstanding with a 4 % coupon rate. If the bonds

A food ingredient company has

20

yeas,

1000

$ par bonds outstanding with a

4 %

coupon rate. If the bonds are currently trading at

79

and there is no bank debt, what is the pretax cost of debt capital?

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