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B. Zero Radius has a cost of equity of 13.84% and an unlevered cost of capital of 12%. The company has RM5,000 in debt that

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B. Zero Radius has a cost of equity of 13.84% and an unlevered cost of capital of 12%. The company has RM5,000 in debt that is selling at par value. The levered value of the firm is RM12,000 and the tax rate is 34%. What is the pre-tax cost of debt? (6 marks)

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