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Suspect Corp. issued a bond with a maturity of 25 years and a semiannual coupon rate of 12 percent 3 years ago. The bond currently

Suspect Corp. issued a bond with a maturity of 25 years and a semiannual coupon rate of 12 percent 3 years ago. The bond currently sells for 94 percent of its face value. The companys tax rate is 35 percent.

What is the pretax cost of debt?

What is the aftertax cost of debt?

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

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