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Jiminy's Cricket Farm issued a 16-year, 6 per cent semi-annual coupon bond 2 years ago. The bond currently sells for 91% of its face value.

Jiminy's Cricket Farm issued a 16-year, 6 per cent semi-annual coupon bond 2 years ago. The bond currently sells for 91% of its face value. The company's tax rate is 38%.

a. What is the company's pretax cost of debt?

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

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