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Home Depot has debt outstanding with a face value of $40 billion. The coupon rate on these bonds is 5.7%. The current yield-to-maturity (YTM) on

Home Depot has debt outstanding with a face value of $40 billion. The coupon rate on these bonds is

5.7%.

The current yield-to-maturity (YTM) on these bonds is

7.8%.

Home Depot’s tax rate is

30%.

What is the effective cost of debt of HomeDepot?

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