What is the pretax cost of debt

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Problem: Acme corp issued a 15-year 6 percent semi annual bond 2 years ago. The bond currently sells for 95 percent of its face value. The companys tax rate is 35 percent.

Required:

Question 1: What is the pretax Cost of Debt

Question 2: What is the after cost of debt

Question 3: Which is more relevant the pretax or the aftertax cost of debt?

Reference no: EM132417996

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