Viserion, Incorporated, is trying to determine its cost of debt. The firm has a debt issue outstanding with $20$ years to maturity that is quoted at $96$ percent of face value. The issue makes semiannual payments and has an embedded cost of $4$ percent annually.

What is the company's pretax cost of debt?

multiple choice $1$

$4\mathrm{.}30\%$

$5\mathrm{.}16\%$

$3\mathrm{.}27\%$

$4\mathrm{.}73\%$

$3\mathrm{.}87\%$

If the tax rate is $24$ percent, what is the aftertax cost of debt?

multiple choice $2$

$3\mathrm{.}27\%$

$2\mathrm{.}94\%$

$3\mathrm{.}59\%$

$4\mathrm{.}58\%$

$4\mathrm{.}30\%$