< Back to Assignment Attempts: Keep the Highest: /3 3. Cost of debt To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) (1 + T) Aa Aa Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 11.10% for a period of eight years. Its marginal federal-plus-state tax rate is 30%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 10-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,092.79 per bond, carry a coupon rate of 11%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 30%. If WGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 5.99% 6.66% 5.33% 7.99%