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The bond currently sells for 88 percent of its face value


Jiminy's Cricket Farm issued a 30-year, 9.4 percent semiannual bond 9 years ago. The bond currently sells for 88 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?

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Basic Computer Science: The bond currently sells for 88 percent of its face value
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