The Cost of Debt and Flotation Costs. Suppose a company will issue new 25-year debt with a par value of $1,000 and a coupon rate of 11%, paid annually. The issue price will be $1,000. The tax rate is 25%. If the flotation cost is 5% of the issue proceeds, then what is the after-tax cost of debt? Round your answer to two decimal places.

two decimal places. What if the flotation costs were 12% of the bond issue? Round your answer to two decimal places