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a . What is Avicorp's pre - tax cost of debt? Note: Compute the effective annual return. b . If Avicorp faces a 4 0

.

What is Avicorp's pre

-

tax cost of debt? Note: Compute the effective annual return.

.

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.

.

The cost of debt is

%

per year.

(

Round to four decimal places.

)

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