L Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual nayments and has a coupon rate of 8 percent annually. a) What is L's pre-tax cost of debt? b) If the tax rate is 35 percent, what is the after-tax cost of debt? a) a) 3.6%; b) 2.3% b) a) 7.3%; b) 3.3% c) a) 7.3%; b) 4.7% d) a) 3.6%; b) 3.3%