Company pretax cost of debt and aftertax cost of debt

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Reference no: EM132046998

Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 13 years to maturity that is quoted at 110 percent of face value. The issue makes semiannual payments and has an embedded cost of 10 percent annually. Required: (a) What is the company's pretax cost of debt? (Do not round your intermediate calculations.) (b) If the tax rate is 36 percent, what is the aftertax cost of debt? (Do not round your intermediate calculations.)

Reference no: EM132046998

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