P14-6 calculating cost of debt lo2waller inc is trying to, Ask an Expert

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P14-6 Calculating Cost of Debt [LO2]

Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 15 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded cost of 7 percent annually (note: this means that the coupon rate is 7% APR). The company's pretax cost of debt (as an APR) is percent. If the tax rate is 35 percent, the aftertax cost of debt (as an APR) is percent. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16))

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