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Avicorp has a 511.2milil on debt irsue outhtonding, with a 5.9k coupon mate. The debt has semlantual coupons, the next coupon is due in six

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Avicorp has a 511.2milil on debt irsue outhtonding, with a 5.9k coupon mate. The debt has semlantual coupons, the next coupon is due in six months, and the debt matures in five yeans. it is cirrenty priced at 89% of par value. a. What is Avicorp's pro-tax cost of dobt? Note: Compute the elfective annual retum. b. If Avisorp laces a 405 tax rate, what is its ater-tax cost of debr? Note Assume that the firm will aways be able to uticite its fult interest tax shield. 2. The cost of dobe is (isper year. (Round to four decimal places.)

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