Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 9 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 12 percent annually. Required:

(a) What is the company's pre-tax cost of debt as an APR? (Do not round your intermediate calculations.)

(b) If the tax rate is 33 percent, what is the after-tax cost of debt as an APR? (Do not round your intermediate calculations.)