Jiminy's Cricket Farm issued a 18-year, 8 percent semiannual bond 3 years ago. The bond currently...

Transcribed Image Text:

Jiminy's Cricket Farm issued a 18-year, 8 percent semiannual bond 3 years ago. The bond currently sells for 92 percent of its face value. The company's tax rate is 22 percent. a. What is the pretax cost of debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the aftertax cost of debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Pretax cost of debt b. Aftertax cost of debt % % Jiminy's Cricket Farm issued a 18-year, 8 percent semiannual bond 3 years ago. The bond currently sells for 92 percent of its face value. The company's tax rate is 22 percent. a. What is the pretax cost of debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the aftertax cost of debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Pretax cost of debt b. Aftertax cost of debt % %