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Question: kaylin has been presented with the following information about bonds...

Question details

Kaylin has been presented with the following information about bonds issued at a discount by Riley Corp.:

Face value: $400,000

Interest rate: 6%

Term: Five years

Cash received from bondholders: $392,000

Market interest rate: 5%

Based on this information, what is the cost of borrowing for Riley Corp.?

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