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Colossus Company has the ability to obtain debt financing at 10 percent. It currently has $2,000,000 in debt outstanding and is considering taking on more

Colossus Company has the ability to obtain debt financing at 10 percent. It currently has $2,000,000 in debt outstanding and is considering taking on more to fund a major expansion. It has a marginal income rate of 25 percent. US Treasury bonds are currently yielding 2.0 percent. What is the firm's PRETAX cost of debt?

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