What is pretax cost of debt-what is aftertax cost of debt

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Jiminy's Cricket Farm issued a 30-year, 7.2 percent semiannual bond 8 years ago. The bond currently sells for 93.5 percent of its face value. The company’s tax rate is 34 percent.

a. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Pretax cost of debt _____ %

b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Aftertax cost of debt _____%

Reference no: EM131324357

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What is pretax cost of debt-what is aftertax cost of debt : Jiminy's Cricket Farm issued a 30-year, 7.2 percent semiannual bond 8 years ago. The bond currently sells for 93.5 percent of its face value. The company’s tax rate is 34 percent. What is the pretax cost of debt? What is the aftertax cost of debt?

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