Determining the aftertax cost of debt

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Reference no: EM13746220

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 ______%? If the tax rate is 35 percent, the aftertax cost of debt (as an APR) is_______%?

Reference no: EM13746220

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