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Pure Michigan issued a bond with the following features: (2.5 Points) Maturity: 15 years Coupon rate 5.0% per annum, but paid semi-annually Par Value: $1,000

Pure Michigan issued a bond with the following features: (2.5 Points)

Maturity: 15 years

Coupon rate 5.0% per annum, but paid semi-annually

Par Value: $1,000

Each bond was sold today for $792.99 but had to pay 2.0% flotation expenses.

A total of 5,675 bonds were sold.

What is the BEFORE-TAX Cost of DEBT? [Make sure you enter annualized cost]

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