Avicorp has a $$10\mathrm{.}4$ million debt issue outstanding, with a $6\mathrm{.}1\%$ coupon rate. The debt has semi$-$annual coupons, the next coupon is due in six months, and the debt

matures in five years. It is currently priced at $93\mathrm{.}21\%$ of par value.

a$.$ What is Avicorp's pretax cost of debt?

b$.$ If Avicorp faces a $25\%$ 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.