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S . Claus & Company is planning a zero coupon bond issue. The bond has a par value of $ 1 , 0 0 0

.

Claus & Company is planning a zero coupon bond issue. The bond has a par value of $

1, 000,

matures in

6

years, and will be sold at a price of $

704.96 .

What is the annual cost of debt

(

MTM

)

to the company on this issue?

q,

4

9

6

7

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