Shanken Corp. issued a 10-year, 8 percent semiannual bond 3 years ago. The bond currently sells for 96 percent of its face value. The company’s tax rate is 35 percent.

**a.** What is the pretax cost of debt? **(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
**

Pretax cost of debt %

**b. **What is the aftertax cost of debt? **(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
**

Aftertax cost of debt %

**c.** Which is more relevant, the pretax or the aftertax cost of debt?

Aftertax cost of debtPretax cost of debt