OrioleLtd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly,Oriolemust make interest payments into the infinite future. If the bondholders receive annual payments of $95and the current price of the bonds is $1,000.00.

What is the pre-tax cost of this debt?(Round answer to 2 decimal places, e.g. 15.25%.)

Pre-tax cost of debt%

What is the after-tax cost of this debt forOrioleif the firm is in the 40 percent marginal tax rate?(Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

After-tax cost of debt