An overview of a firm's cost of debt

To calculate the after$-$tax cost of debt, multiply the before$-$tax cost of debt by

Perpetualcold Refrigeration Company $($PRC$)$ can borrow funds at an interest rate of $11\mathrm{.}10\%$ for a period of four years. Its marginal federal$-$plus$-$state tax rate is $30\%.$ PRC$\text{'}$s after$-$tax cost of debt is $($rounded to two decimal places$).$

At the present time, Perpetualcold Refrigeration Company $($PRC$)$ has $15-$year noncallable bonds with a face value of $$1,000$ that are outstanding. These bonds have a current market price of $$1,329\mathrm{.}55$ per bond, carry a coupon rate of $12\%,$ and distribute annual coupon payments. The company incurs a federal$-$plus$-$state tax rate of $30\%.$ If PRC wants to issue new debt, what would be a reasonable estimate for its after$-$tax cost of debt $($rounded to two decimal places$)?$

$6\mathrm{.}82\%$

$6\mathrm{.}53\%$

$5\mathrm{.}11\%$

$5\mathrm{.}68\%$