2. An overview of a firm's cost of debt Aa Aa (1 T) To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Andalusian Limited (AL) can borrow funds at an interest rate of 7.30% for a period of six years. Its marginal (rounded to two decimal places) federal-plus-state tax rate is 35%. AL's after-tax cost of debt is 4.75% At the present time, Andalusian Limited (AL) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,136.50 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 35%. If AL wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 7,94% 5.96% 7.61% 6.62%