= Homework: Lab #3 Question 4, Problem 12-6 Part 1 of 2 HW Score: 0%, 0 of 28 points Points: 0 of 2 Save Avicorp has a $10.2 million debt issue outstanding, with a 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 96% of par value. a. What is Avicorp's pre-tax cost of debt? Note: Compute the effective annual return. b. If Avicorp faces a 40% tax rate, what is its after-tax cost of debt? Note: Assume that the firm will always be able to utilize its full interest tax shield. .. a. The cost of debt is % per year. (Round to four decimal places.) Help me solve this View an example Ask my instructor Clear all Check