Pearces Cricket Farm issued a 30-year, 7% semiannual bond 5 years ago. The bond currently sells for 95% of its face value. The companys tax rate is 35%. Assume the par value of the bond is $1,000. a. What is the pre-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Pre-tax cost of debt % b. What is the after-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 3 decimal places.) After-tax cost of debt % c. Which is more relevant, the pre-tax or the after-tax cost of debt?

multiple choice After-tax cost of debt Pre-tax cost of debt