A company is expected to issue new bonds with a face value of $1,000. The indenture specifies that the annual coupon rate is expected to be 5.5% and the bonds will mature in 15 years. Similar bonds are currently priced at 98.2% of par (or face value). If the companys marginal tax rate is 24%, what is the after-tax cost of debt (in percent)? Assume coupons are paid annually.

4.32%

4.15%

4.99%

5.25%

5.68%

4.75%