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Calculating Cost of Debt. ICU Window, Inc is trying to determine its cost of debt. The firm has a debt issue outstanding with seven years to maturity that is quoted at 96 percent of face value. The issue makes semiannual payments and has embedded cost of 4.9 percent anually. What is the company's pretax cost of debt? If the tax rate is 38 percent, what is the aftertax cost of debt?

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