Waller, Inc., is trying to determine its cost of debt. The firm has a debt issue...

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Finance

Waller, Inc., is trying to determine its cost of debt. The firmhas a debt issue outstanding with 14 years to maturity that isquoted at 104 percent of face value. The issue makes semiannualpayments and has an embedded cost of 7 percent annually.
(a) What is the company's pretax cost of debt? (Do notround your intermediate calculations.)
(Click to select)7.20%6.89%6.56%6.23%6.82%

(b)
If the tax rate is 35 percent, what is the aftertax cost ofdebt? (Do not round your intermediatecalculations.)

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Waller, Inc., is trying to determine its cost of debt. The firmhas a debt issue outstanding with 14 years to maturity that isquoted at 104 percent of face value. The issue makes semiannualpayments and has an embedded cost of 7 percent annually.(a)What is the company's pretax cost of debt? (Do notround your intermediate calculations.)(Click to select)7.20%6.89%6.56%6.23%6.82% (b)If the tax rate is 35 percent, what is the aftertax cost ofdebt? (Do not round your intermediatecalculations.)

(a)	What is the company's pretax cost of debt? (Do notround your intermediate calculations.)
	(Click to select)7.20%6.89%6.56%6.23%6.82%