Question: please round answer to four decimal places Avicorp has a $10.7 million debt issue outstanding, with a 59% coupon rate. The debt has semi-annual coupons,

please round answer to four decimal places

Avicorp has a $10.7 million debt issue outstanding, with a 59% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debe matures in five years. It is currently priced at 95% 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 CD a. The cost of debt is per year. (Round to four decimal places)

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