Koala Express is a restaurant chain that is considering an expansion by issuing $300 million 20-year bonds.
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Question:
Koala Express is a restaurant chain that is considering an expansion by issuing $300 million 20-year bonds. The bond has a coupon rate of 7% and is expected to yield a net proceeds of $940 per $1000 face value to the firm. If Koala's tax rate is 30%, what is Koala's cost of debt?
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