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KatyDid Clothes has a $120 million (face value) 30-year bond issue selling for 101 percent of par that carries a coupon rate of 9 percent.

KatyDid Clothes has a $120 million (face value) 30-year bond issue selling for 101 percent of par that carries a coupon rate of 9 percent. Assume the Par Value of each bond is $1,000 and semiannual compounding.

What would be Katydids before-tax component cost of debt?

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