Intro

Lugget Corp. has one bond issue outstanding with an annual coupon of $4\%,$ a face value of $$1,000$ and a price of $$1,085\mathrm{.}3,$ which matures in $10$ years. The company's tax rate is $33\%.$

Part $1$

Attempt $\frac{7}{10}$ for $0\mathrm{.}7$ pts$.$

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

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Part $2$

Attempt $\frac{2}{10}$ for $0\mathrm{.}9$ pts$.$

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

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