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Lugget Corp. has one bond issue outstanding with an annual coupon of 3 . 8 % , a face value of $ 1 , 0

Lugget Corp. has one bond issue outstanding with an annual coupon of 3.8%, a face value of $1,000 and a price of $1,068.24, which matures in 10 years. The company's tax rate is 33%.What is Lugget's pre-tax cost of debt?

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