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What is advance pre-tax cost of debt

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Advance Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 17 years to maturity that is quoted at 95 percent of face value. The issue makes semiannual payments and has a coupon rate of 8 percent annually.

What is Advance's pre-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Cost of debt %

If the tax rate is 35 percent, what is the after-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Cost of debt %

Reference no: EM132473533

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