Adams Inc has a capital structure that consists of 70% common stock and 30% long-term debt. In order to calculate Adams WACC, an analyst has accumulated the following information:

The company currently has 15-year, 8% annual coupon bonds that have a face value of $1,000 and sell for $1,075.

The risk-free rate is 5%. The market risk premium is 4%.

The beta on Clarks common stock is 1.1.

The companys tax rate is 38%.

Based on the information presented above, answer the following two questions:

What is the pre-tax cost of debt?

What is the after-tax cost of debt?