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Suppose a project financed via an issue of debt requires five annual interest payments of $20 million each year. If the tax rate is 30%,

Suppose a project financed via an issue of debt requires five annual interest payments of $20 million each year. If the tax rate is 30%, and the present value of the interest tax shield is $25.98 million, what is the firm's cost of debt?

A. 5% B. 4% C. 3% D. 6% E. 7%

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