What is percentage cost of debt

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Reference no: EM132020398

Micro Spinoffs Inc. issued 20-year debt a year ago at par value with a coupon rate of 5%, paid annually. Today, the debt is selling at $1,250. If the firm’s tax bracket is 40%, what is its percentage cost of debt? Assume a face value of $1,000. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.

Reference no: EM132020398

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