of fiscal year 2015 , its total debt had increased to $6.5 billion. Its fiscal 2015 interest expense was $198 million, and its assumed statutory tax rate was 37%6. a. Compute the company's average pretax borrowing cost. (Hint: Use the average amount of debt as the denominator in the computation.) Round your answer to one decimal place (ex: 0.0345=3.5% ). % b. Assume that the book value of its debt equals its market value. Then, estimate the company's cost of debt capital. Round your answer to one decimal place (ex: 0.0345=3.5% )