Question: A company has outstanding long-term bonds with a face value of $1,000, a 7% coupon, and a 9% yield to maturity. If the company's tax

A company has outstanding long-term bonds with a face value of $1,000, a 7% coupon, and a 9% yield to maturity. If the company's tax rate is 30%, what would its after-tax cost of debt be?

a. 7.0%

b. 8.0%

c. 6.3%

d. 7.5%

e. 5.2%

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