Question: Sheridan has determined that it could issue $1200 face value bonds with an 9 percent coupon paid semiannually and a 5-year maturity at $1143.09 per

Sheridan has determined that it could issue $1200 face value bonds with an 9 percent coupon paid semiannually and a 5-year maturity at $1143.09 per bond. If Sheridans marginal tax rate is 39 percent, its after-tax cost of debt is closest to:

a) 5.9 percent.

b) 6.5 percent.

c) 6.2 percent.

d) 5.8 percent.

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