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


Shanken Corp. issued a bond with a maturity of 30 years 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.

a. What is the pretax cost of debt?

b. What is the aftertax cost of debt?

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Financial Management: What is the pretax cost of debt what is the aftertax cost
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