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XYZ Corporation's bonds are priced for a yield to maturity of 5.2% and have a rating of BB. According to the rating agency, the historical

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XYZ Corporation's bonds are priced for a yield to maturity of 5.2% and have a rating of BB. According to the rating agency, the historical yearly default rate of BB bonds has been 3.1%, and bondholders have typically lost 80% of their value. Which of the following is an estimate of XYZ's cost of debt from this information? 2.72% 4.58% 2.1% 5.2%

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