A company chief financial officer (CFO) is estimating his companys cost of debt. The companys bonds offer a coupon rate of 8% with semiannual payments, has exactly 3 years remaining until maturity, and each $1,000 par bond is currently priced at $960.

The companys cost of debt is closest to:

A) 4.78%

B) 5.48%

C) 8.00%

D) 9.57%