Olympic Sports has two issues of debt outstanding. One is a 4% coupon bond with a face value of $34 million, a maturity of 15 years, and a yield to maturity of 5%. The coupons are paid annually. The other bond issue has a maturity of 20 years, with coupons also paid annually, and a coupon rate of 5%. The face value of the issue is $39 million, and the issue sells for 93% of par value. The firm's tax rate is 20%.

a.What is the before-tax cost of debt for Olympic?

b.What is Olympic's after-tax cost of debt?

(For all the requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

a.Before-tax cost of debt ? %

b.After-tax cost of debt ? %