10.38:

Which of the following companies will have the lowest cost of borrowing, assuming all four companies issued $500,000 in six-year bonds with a contractual interest rate of 8 percent?

A : Company 2, which sold its bonds at 97

B : Company 1, which sold its bonds at 92

C : Company 4, which sold its bonds at 107

D : Company 3, which sold its bonds at 102