Shanken Corp. issued a 30-year, 11 percent semiannual bond 5 years ago. The bond currently sells for 112 percent of its face value. The companys tax rate is 33 percent.

Requirement 1:

What is the pretax cost of debt? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

Pretax cost of debt

%

Requirement 2:

What is the aftertax cost of debt? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

Aftertax cost of debt

%

Requirement 3:

Which is more relevant, the pretax or the aftertax cost of debt?

(Click to select) Aftertax cost of debt Pretax cost of debt