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Jiminy's Cricket Farm issued a 30-year, 10.8 percent semiannual bond 5 years ago. The bond currently sells for 84.5 percent of its face value. The

Jiminy's Cricket Farm issued a 30-year, 10.8 percent semiannual bond 5 years ago. The bond currently sells for 84.5 percent of its face value. The companys tax rate is 40 percent.

Required:
(a)

What is the pretax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Pretax cost of debt %

(b)

What is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Aftertax cost of debt %

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