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The debt of a company is in the forms of bonds that have a yield-to-maturity of 6.5%. Based on the bond rating, it is estimated

The debt of a company is in the forms of bonds that have a yield-to-maturity of 6.5%. Based on the bond rating, it is estimated that the probability of default for the bond is 6% per year. If the bond defaults, the loss is expected to be 50%. What is the cost of debt for the company?

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