Question $3$

$10$ pts

Thaler & Co$.$ currently has its $20-$year bonds trading at $$878,$ with a $$1,000$ par value. Those bonds have a coupon rate of $8\%$ and pay out semi$-$annually. Thaler's tax rate is $21\%.$

What is Thaler's after tax cost of debt capital?

$4\mathrm{.}68\%$

$6\mathrm{.}86\%$

$3\mathrm{.}43\%$

$7\mathrm{.}39\%$

$9\mathrm{.}36\%$