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Assume a firm's debt is selling at face value. What is the firm's cost of debt if the debt has a coupon rate of 7.5%

Assume a firm's debt is selling at face value. What is the firm's cost of debt if the debt has a coupon rate of 7.5% and the tax rate is 35%?

a) 5.21%

b) 4.88%

c) 5.35%

d) 4.97%

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