What is the pretax cost of debt? what is the aftertax cost, Ask an Expert

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Jimmy's Cricket Farm issues a 30 year, 8% semiannual bond 7 years ago. The bond currently sells for 95% of its face value. The company's tax rate 35%.

A. What is the pretax cost of debt?

B. What is the aftertax cost of debt?

C. Which is more relevant, the pretax or the aftertax cost of debt? why?

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