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Steve, MBA

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Compute the cost of capital for the firm for the following:
a.

Resolved Question:

Compute the cost of capital for the firm for the following:

a. A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 10.3%. The bonds have a current market value of $1,124 and will mature in 10 years. The firm's marginal tax rate is 34%.

The cost of capital from this bond debt is ___%. (Round to two decimal places.)