Cost of Debt. Consider a five-year medium-term note with a par value of CHF 40 million. Annual interest payments of 4% are calculated based on par value. If the issue/offer price----the amount obtained by the firm from the issue as a percent of par-- is 97%, what are CHF cash flows? What is the cost of debt (Swiss francs, or CHF)? [hint: Cost of debt equals the IRR of not related cash flows.]

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