Lily Tucker-Pritchett Boutique has a bond issue outstanding that matures in fourteen years. The bonds pay interest semi-annually. Currently, the bonds are selling for $980, the par value of the bonds is $1,000, and they carry an 8 percent coupon with interest paid semi-annually. The firm's marginal tax rate is 35 percent and its average tax rate is 30 percent. What is the firm's cost of debt? 2.88 percent 5.45 percent 8.24 percent 10.72 percent 5.76 percent 5.36 percent Last year Cherrios, Inc.'s operating income (EBIT) increased by 22 percent while its sales increased by 15%, while EPS rose by 44 percent. The firm's tax rate is 33%. What is Cheerios, Inc.'s degree of financial leverage (DFL)? 2.19 68 1.47 7.35 29.48 20