Question: Advance inc is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted

Advance inc is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 105% of face value. The issue makes semi-annual payments and has a coupon rate of 8% annually. What is Advance´s pre-tax cost of debt? If the tax rate is 28%, what is the after-tax cost of debt?

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