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Ilead Corp. issued a 25-year, 12% semiannual bond 3 years ago. The bond currently sells for 94% of its face value. The company's tax rate

Ilead Corp. issued a 25-year, 12% semiannual bond 3 years ago. The bond currently sells for 94% of its face value. The company's tax rate is 35%.

a. What is the pre-tax cost of debt?

b. What is the after-tax cost of debt?

c. Which is more relevant, the pre-tax or the after-tax cost of debt?

Round the final answer to 2 decimal places.

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