Watanabe, Incorporated, is trying to determine its cost of debt. The firm has a debt issue outstanding with 22 years to maturity that is quoted at 94 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually.
What is the company’s pretax cost of debt?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
If the tax rate is 21 percent, what is the aftertax cost of debt?
Note: Do not round intermediate calculations and enter your