Avicorp has a $14.2 million debt issue outstanding, with a 6.2% 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 94% of par value.

a. What is Avicorp's pre-tax cost of debt? Note: Compute the effective annual return. (Round answer to four decimal places)

b. If Avicorp faces a 40% tax rate, what is its after-tax cost of debt? (Round answer to four decimal places)