Olympic Sports has two issues of debt outstanding. One is a 9% coupon bond with a face value of $29 million, a maturity of 10 years, and a yield to maturity of 10%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with coupons also paid annually, and a coupon rate of 10%. The face value of the issue is $34 million, and the issue sells for 96% of par value. The firm's tax rate is 20%.
a. What is before tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. What is Olympic's after tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)