Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 11 years to maturity that is quoted at 108 percent of face value. The issue makes semiannual payments and has an embedded cost of 8 percent annually. Required:

(a) What is the company's pretax cost of debt? (Do not round your intermediate calculations.)

(b) If the tax rate is 36 percent, what is the after-tax cost of debt? (Do not round your intermediate calculations.)