Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 106 percent of face value. The issue makes semiannual payments and has an embedded cost (i.e. a coupon rate as an APR) of 9 percent annually.

Required:

(a)	What is the company's pre-tax cost of debt as an APR? (Do not round your intermediate calculations.)
	(Click to select) 8.20% 8.53% 8.61% 7.79% 9.20%

(b)	If the tax rate is 37 percent, what is the after-tax cost of debt as an APR? (Do not round your intermediate calculations.)
	(Click to select) 5.17% 4.42% 4.91% 5.43% 5.38%