Avicorp has a $10.7 million debt issue outstanding, with a 6.1% 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 95% of par value 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. 2. The cost of debt is % per year. (Round to four decimal places.)