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Suppose a firm has a bond issue currently outstanding that has 25 years left to maturity. The coupon rate is 8.5% and the coupons are

Suppose a firm has a bond issue currently outstanding that has 25 years left to maturity. The coupon rate is 8.5% and the coupons are made semi-annually. The bond is currently selling for 950 per 1000 bond. The firm faces a 35% tax rate. What is the firm's effective cost of debt?

Please show your work without using a financial calculator

A) 4.50

B) 9.01

C) 5.85

D) 2.93

E) 5.53

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