Hello,

I need a little help figuring out the answer to this homework problem. Can someone help me?

BBG Corporation just issued 20-year, 10 percent coupon bonds, for which the firm incurred the flotation costs equal to 4.0 percent of the $1,000 face value. Interest is paid semi-annually and the firm is in the 30 percent corporate tax bracket. If investors are willing to pay $1,025 for each of the bonds, what is the after-tax cost of debt for bonds? 712 percent 6.80 percent 10.18 percent 8.24 percent 9.72 percent