1.Calculate the pretax cost and the aftertax cost of debt.

***ALL ANSWERS MUST BE ENTERED AS A FORMULA. PLEASE DO NOT HARD CODE VALUES IN THE CALCULATIONS***

Mudvayne, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually. What is the company's pretax cost of debt? If the tax rate is 35 percent, what is the aftertax cost of debt? Settlement Maturity Price (% of par) Coupon rate Payments per year Tax rate 01/01/00 01/01/18 107 6% 35% Complete the following analysis. Do not hard code values in your calculations. Pretax cost Aftertax cost of debt