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.

a$.$ The cost of debt is $\%$ per year. $($Round to four decimal places.$)$