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Titans, Inc. has 7.5 percent bonds outstanding that mature in 11 years. The bonds pay interest semiannually and have a face value of $1,000. Currently,

Titans, Inc. has 7.5 percent bonds outstanding that mature in 11 years. The bonds pay interest semiannually and have a face value of $1,000. Currently, the bonds are selling for $1,002 each. What is the firm's pretax cost of debt?

Pretax cost of debt = %

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