2. An overview of a firm's cost of debt Aa Aa The before-tax cost of debt is the interest rate that a firm pays on any new debt financing. Cold Goose Metal works (CGMw) can borrow funds at an interest rate of 10.20% for a period of seven years. Its marginal federal-plus-state tax rate is 45%. CGMw's after-tax cost of debt is 5.61% (rounded to two decimal places) At the present time, Cold Goose Metal Works (CGMW) has a series of ten-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,278.41 per bond, carry a coupon rate of 11%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 45%. If CGMw wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 0 3.10% 3.48% 4.45% 3.87%