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Jiminys Cricket Farm issued a 20-year, 4 percent semiannual coupon bond 6 years ago. The bond currently sells for 95 percent of its face value.
Jiminys Cricket Farm issued a 20-year, 4 percent semiannual coupon bond 6 years ago. The bond currently sells for 95 percent of its face value. The companys tax rate is 25 percent. a. What is the companys pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the companys aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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