Waller inc is trying to determine its cost of debt the firm, Ask an Expert

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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 6 percent annually.

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

(b) If the tax rate is 33 percent, what is the aftertax cost of debt? (Do not round your intermediate calculations.)

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Financial Management, Finance

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