Suspect Corp. issued a bond with a maturity of 20 years and a semiannual coupon rate of 6 percent 2 years ago. The bond currently sells for 92 percent of its face value. The companys tax rate is 35 percent. a.

What is the pretax cost of debt? Pretax cost of debt = %

b. What is the aftertax cost of debt? Aftertax cost of debt = % c.

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

Aftertax cost of debt

Pretax cost of debt