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Crowell Inc. issued 20-year, 4 percent semiannual coupon bonds with par value of $1,000. The bond price is quoted at 110% of the par. What

Crowell Inc. issued 20-year, 4 percent semiannual coupon bonds with par value of $1,000. The bond price is quoted at 110% of the par. What is its pre-tax cost of debt?

a) 2.79%

b) 3.31%

c) 4.66%

d) 1.66%

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