What is the aftertax cost of debt

Reference no: EM13261937

Jiminy's Cricket Farm issued a 30-year, 9.8 percent semiannual bond 5 years ago. The bond currently sells for 87 percent of its face value. The company's tax rate is 40 percent.

Required:

What is the pretax cost of debt?

What is the aftertax cost of debt?

Reference no: EM13261937

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