Question: Assuming the current going rate of US Treasury notes is 2 . 5 % , what is the cost of debt for Firm Q ?

Assuming the current going rate of US Treasury notes is 2.5%, what is the cost of debt for Firm Q? Assume Firm Q has a credit risk spread of 4% and a tax rate of 25%.
a.1.0%
b.2.5%
c.6.5%
d.4.875%

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