Jiminy's Cricket Farm issued a 30-year, 7.4 percent semiannual bond 9 years ago. The bond currently sells for 93 percent of its face value. The book value of this debt issue is $92 million. In addition, the company has a second debt issue, a zero coupon bond with 12 years left to maturity; the book value of this issue is $62 million, and it sells for 53.5 percent of par. The companys tax rate is 30 percent.

a) What is the aftertax cost of the 7.4 coupon bond?

b) What is the aftertax cost of the zero coupon bond?

c) What is the aftertax cost of debt?