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A company is going to issue a $1,000 par value bond that pays a 5% annual coupon. The company expects investors to pay $684.5 for

A company is going to issue a $1,000 par value bond that pays a 5% annual coupon. The company expects investors to pay $684.5 for the 20-year bond. The expected flotation cost per bond is $50, and the firm is in the 30% tax bracket. Compute the firm's after-tax cost of new debt. Round your calculations to the nearest 0.01%.

Please include the TVM calculations.

A. 6.31

B. 5.41

C. 5.86

D. 4.96

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