What is the company pretax cost of debt

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Reference no: EM131068838

Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 100 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually.

a) What is the company's pretax cost of debt? (Do not round your intermediate calculations.)

b) If the tax rate is 32 percent, what is the aftertax cost of debt? (Do not round your intermediate calculations.)

Reference no: EM131068838

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