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Jimmy's farm issued a 20 year 8% semiannual bond 3 years ago. The bond correctly sells...

Jimmy's farm issued a 20 year 8% semiannual bond 3 years ago. The bond correctly sells for 90% of its face value. the company tax rate is 40%.

a. What is the pretax cost of debt?

B. What is the after tax cost of debt?

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