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Juno has 6.5 percent bonds outstanding that mature in 17 years. The bonds pay interest semiannually and have a face value of $1,000. Currently, the

Juno has 6.5 percent bonds outstanding that mature in 17 years. The bonds pay interest semiannually and have a face value of $1,000. Currently, the bonds are selling for $1,031.25 each. What is Juno's pre-tax cost of debt? (Hint: Find the yield to maturity of its bonds. Be sure to convert it into an annual rate.)

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