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Microsoft Corporation, a leading technology company, is considering various financing options for its expansion plans. To evaluate the cost of debt, Microsoft's financial analysts have gathered the following information: the company's interest expense for the fiscal year amounted to $10,000,000, and its total debt stands at $100,000,000. The cost of debt represents the effective interest rate a company pays on its borrowed funds. By dividing the interest expense by the total debt, the cost of debt can be calculated. Subsequently, this rate serves as a crucial component in determining the company's overall cost of capital. With these figures in hand, Microsoft aims to make informed decisions regarding its financing strategies, ensuring optimal utilization of resources while minimizing financial risk.