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Jiminy's Cricket Farm issued a 25-year, 5.9 percent semiannual bond 2 years ago. The bond currently sells for 110 percent of its face value. The
Jiminy's Cricket Farm issued a 25-year, 5.9 percent semiannual bond 2 years ago. The bond currently sells for 110 percent of its face value. The company's tax rate is 24 percent. |
a. | What is the 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 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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