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The Kraft Heinz Company wants to issue debt totaling $1,000,000,000 for 1 year and has the following two options: Coupon Upfront fees (% Type Interest

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The Kraft Heinz Company wants to issue debt totaling $1,000,000,000 for 1 year and has the following two options: Coupon Upfront fees (% Type Interest rate (p.a.) payments of issue) Bond Semiannual 4.50% 1.50% Commercial Note Annual 4.25% 1.25% Which option has the lowest all-in cost (internal rate of return)? (Hint: For the bond, it is easier to first find the semiannual internal rate of return, and to annualize it afterwards. You will need to apply the quadratic formula.) (10 points)

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