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What is the cost of debt of the stock for harvey norman

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Problem 1: Harvey Norman has a beta of 1.1 and a quoted credit default spread (CDS) of 1.05%. If the risk-free rate is 0.95%, the implied equity risk premium is 6.5%, and the credit rating of Harvey Norman is BBB, what is the cost of debt of this stock?

a. 6.2%
b. 2.0%
c. 3.5%
d. 4.1%

Reference no: EM132775835

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