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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.)
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Basic Math
Basic Math
Basic Math