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Pearces Cricket Farm issued a 30-year, 9% semiannual bond 3 years ago. The bond currently sells for 96% of its face value. The companys tax

Pearces Cricket Farm issued a 30-year, 9% semiannual bond 3 years ago. The bond currently sells for 96% 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?

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