Question: Oriole has determined that it could issue $1350 face value bonds with an 9 percent coupon paid semiannually and a 5-year maturity at $1232.63 per

Oriole has determined that it could issue $1350 face value bonds with an 9 percent coupon paid semiannually and a 5-year maturity at $1232.63 per bond. If Orioles marginal tax rate is 35 percent, its after-tax cost of debt is closest to:

7.7 percent.

7.0 percent.

7.4 percent.

7.1 percent.

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