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Jiminy crickets farm issued a bond with 30 years to maturity and a semi annual coupon rate of 5% three years ago. The bond currently

Jiminy crickets farm issued a bond with 30 years to maturity and a semi annual coupon rate of 5% three years ago. The bond currently sells for 94% of his face value. The companys tax rate is 22%.

What is the pretax cost of debt?

What is the after tax cost of debt?

Which is more relevant, the pretax or after tax cost of debt?

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