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Jiminy's Cricket Farm issued a 20-year, 7 percent semiannual coupon bond 5 years ago. The bond currently sells for 94 percent of its face
Jiminy's Cricket Farm issued a 20-year, 7 percent semiannual coupon bond 5 years ago. The bond currently sells for 94 percent of its face value. The company's tax rate is 24 percent. a. What is the company's pretax cost of debt? Note: 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 company's aftertax cost of debt? Note: 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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