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Jiminy's Cricket Farm Issued a bond with 15 years to maturity and a semlannual coupon rate of 6 percent 4 years ago. The bond currently
Jiminy's Cricket Farm Issued a bond with 15 years to maturity and a semlannual coupon rate of 6 percent 4 years ago. The bond currently sells for 93 percent of its face value. The company's tax rate Is 23 percent. a. What Is the pretax cost of debt? (Do not round Intermedlate calculatlons and enter your answer as a percent rounded to 2 declmal places, e.g., 32.16.) b. What Is the aftertax cost of debt? (Do not round Intermedlate calculatlons and enter your answer as a percent rounded to 2 declmal places, e.g., 32.16.) a. Pretsx cost of debt 96 b. Aftertax cost of debt 96 c. Which Is more relevant, the pretax or the aftertax cost of debt? Aftertax cost of debt O Pretax cost of debt
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