Jiminy's Cricket Farm issued a15-year,4 percent semiannual coupon bond2 years ago. The bond currently sells for 91
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Question:
Jiminy's Cricket Farm issued a15-year,4 percent semiannual coupon bond2 years ago. The bond currently sells for 91 percent of its face value. The company's tax rate is 21 percent.
a. What is the company's 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.)
b.What is the company's 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.)
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