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ABC Corp has an outstanding bond traded at $980. The bond has a 4% semi-annual coupon and has 10 years to maturity. Suppose ABC Corp

ABC Corp has an outstanding bond traded at $980. The bond has a 4% semi-annual coupon and has 10 years to maturity. Suppose ABC Corp is planning to fund a new project with 40% debt. Which one of the following is the best indication of ABC Corp's before-tax annual cost of borrowing?

A. 4.00%

B. 4.24%

C. 2.00%

D. 2.12%

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