Question: Avicorp has a $ 1 3 . 4 million debt issue outstanding, with a 6 . 2 % coupon rate. The debt has semiannual coupons,

Avicorp has a $13.4 million debt issue outstanding, with a 6.2% coupon rate. The debt has semiannual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 94% of par value.a. What is Avicorps pretax cost of debt? b. If Avicorp faces a 40% tax rate, what is its after-tax cost of debt?

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