Please answer the following, based on the information provided for the firm ABC: the company finances its operations and growth opportunities, using common equity, debt, and preferred equity. It issued a 10 year, 6 percent (coupon rate of 6%) bonds 3 years ago. This annual-coupon bond is currently selling for $980, and its face value is $1000.

What comes closest to ABCs pre-tax cost of debt?

Please answer the following, based on the information provided for the firm ABC: the company finances its operations and growth opportunities, using common equity, debt, and preferred equity. It issued a 10 year, 6 percent (coupon rate of 6%) bonds 3 years ago. This annual-coupon bond is currently selling for $980, and its face value is $1000.

What comes closest to ABCs pre-tax cost of debt?

8%

3%

4%

5%

6%