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Firm pretax cost of debt

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Reference no: EM131106527

Madison Square Stores has a $20 million bond issue outstanding that currently has a market value of $18.6 million. The bonds mature in 6.5 years and pay semiannual interest payments of $35 each. What is the firm's pretax cost of debt?

  • 4.21 percent
  • 8.42 percent
  • 7.58 percent
  • 7.74 percent
  • 7.80 percent

Reference no: EM131106527

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