What is the pretax cost of debt

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Reference no: EM13911342

Jiminy's Cricket Farm issued a 30-year, 10.4 percent semiannual bond 9 years ago. The bond currently sells for 85.5 percent of its face value. The company’s tax rate is 30 percent.

(a) What is the pretax cost of debt?

(b) What is the aftertax cost of debt?

Reference no: EM13911342

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What is the pretax cost of debt : Jiminy's Cricket Farm issued a 30-year, 10.4 percent semiannual bond 9 years ago. The bond currently sells for 85.5 percent of its face value. The company’s tax rate is 30 percent. What is the pretax cost of debt? What is the aftertax cost of debt?

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