Intro

Lugget Corp. has one bond issue outstanding with an annual coupon of $4\mathrm{.}2\%,$ a face value of $$1,000$ and a price

of $$938\mathrm{.}23,$ which matures in $10$ years. The company's tax rate is $31\%.$

Part $1$

What is Lugget's pre$-$tax cost of debt?

Part $2$

What is the company's after$-$tax cost of debt?