6.4%, paid semi-annually

Suppose a company issues 10 year debt with a par value of $1,000 and a coupon rate of 6.4%, paid semi-ar The issue price will be $980. The tax rate is 30%. If the flotation costs are 4.5% of the issue proceeds, For the avoidance of doubt, assume the flotation costs are more than de minimis. a. What is the company's pre-tax cost of debt? a. What is the company's after-tax cost of debt