2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 7.30% for a period of six years. Its marginal federal-plus-state tax rate is 45% WGC's after tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 5-year noncalable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,229 24 per bond, carry a coupon rate of 10%, and distribute annual coupon payments. The company incursa federal-plus-state tax rate of 45% If WGC wants to issue new debt, what would be a reasonable estimate for its after tax cost of debt (rounded to two decimal places) 2.35% 3.00% 3.139 2.61% Grade It Now Save & Continue