Attempts Keep the Highest: 3 3. Cost of debt Aa Aa The is the interest rate that a firm pays on any new debt financing Three waters Company (TWC) can borrow funds at an interest rate of 9.70% for a period of five years. Its marginal federal-plus-state tax rate is 35%. TWC's after-tax cost of debt is (rounded to two decimal places). At the present time, Three Waters Company (TWC) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,181.96 per bond, carry a coupon rate of 13%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 35%. If TwC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 8.04% 6.29% 0 6.99% 8.39% Flash Player WIN 31.0.0.122