Rogers All$-$American Soup Kitchens is a non$-$profit organization that issued bonds last year

carrying a yield of $8\%.$ As a charitable non$-$profit, Rogers is tax$-$exempt. Yields on similar bonds

this year are $20\%$ higher.

a$.$ If Rogers issued additional bonds this year, what would the after$-$tax cost of debt be for

them?

b$.$ Suppose that the IRS finds that Rogers is breaking accounting rules for charitable

organizations and rescinds its non$-$profit status. With a tax rate of $30\%,$ what would the

after$-$tax cost of debt be now?