Advance inc is trying to determine its cost of debt. The firm has a debt issue outstanding

Question:

Advance inc is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 105% of face value. The issue makes semi-annual payments and has a coupon rate of 8% annually. What is Advance´s pre-tax cost of debt? If the tax rate is 28%, what is the after-tax cost of debt?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...