A company has bonds outstanding that mature in 13 years, have a 6 percent coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,040. What is the company's aftertax cost of debt if its tax rate is 32 percent?

a. 2.97 percent

b. 3.12 percent

c. 3.78 percent

d. 4.58 percent

e. 5.56 percent