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S has 1 million shares outstanding with a current share price $30 (the book value per share is $10). S has also bond issues with

S has 1 million shares outstanding with a current share price $30 (the book value per share is $10). S has also bond issues with a face value of $20 million, currently selling for $100. The bonds are to be matured in 2 years with a 3% coupon rate. Calculate Ss pretax cost of debt.

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