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Catnip Stores has a $20 million bond issue outstanding that currently has a market value of $21 million. The bonds pay semiannual coupons, have a
Catnip Stores has a $20 million bond issue outstanding that currently has a market value of $21 million. The bonds pay semiannual coupons, have a coupon rate of 9.7% and a yield to maturity of 10.45%. The tax rate is 36.8%. What is the firm's pre-tax cost of debt? Input your answer as a decimal rounded to four decimal places.
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