Sunrise, Inc., is trying to determine its cost of debt. The first has a debt issue outstanding with 23 years to maturity that is quoted at 96 percent of face value. The issue makes semiannual payments and has an embedded cost of 5 percent annually. What is the company's pretax cost of debt? if the tax rate is 21 percent, what is the after-tax cost of debt?

Sunrise, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is quoted at 96 percent of face value. The issue makes semiannual payments and has an embedded cost of 5 percent annually. What is the company's pretax cost of debt? If the tax rate is 21 percent, what is the aftertax cost of debt? Input Area: Settlement 1/1/2020 1/1/2043 Maturity Price (% of par) 96 Redemption (% of par) 100 Coupon rate 5% Payments per year Tax rate 2 21% Output Area: Pretax cost of debt Aftertax cost of debt