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Avicorp has a $14.4 million debt issue outstanding, with a 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in 6
Avicorp has a $14.4 million debt issue outstanding, with a 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in 6 months, and the debt matures in five years. It is currently priced at 94% of par value.
A. The cost of debt is ___ % per year (6 decimals)
B. If Avicorp faces a 40% tax rate, the after-tax cost of debt is ____% (6 decimals)
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