What is the pretax cost of debt and aftertax cost of debt

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Reference no: EM131966865

Jiminy’s Cricket Farm issued a bond with 30 years to maturity and a semiannual coupon rate of 10 percent 4 years ago. The bond currently sells for 94 percent of its face value. The company’s tax rate is 35 percent. what is the pretax cost of debt? what is the aftertax cost of debt? Which is more relevant, the pretax or the aftertax cost of debt? Please provide step by step explanation

Reference no: EM131966865

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