A $1,000 par value bond with a market price of $970 and a coupon interest rate of 10 %. Flotation costs for a new issue would be approximately 5 %. The bonds mature in 10 years and the corporate tax rate is 33 %. What is the cost of the bond for the company?

a) 11.4%

b) 6.6 %

c) 7.6%

d) 3.3%