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Business, 30.11.2019 02:31 germainenez8403

Suppose the risk-free rate is 3.5%; on average, an aaa-rated corporate bond carries a credit spread of 0.3%, an a-rated corporate bond carries a credit spread of 1.1%, and a b-rated corporate bond carries a credit spread of 3.9%. company xyz’s outstanding debt is rated bbb by rating agencies. what would be the cost of debt for xyz based on prevailing market rates?

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