Before$-$tax cost of debt$$Gronseth Drywall$$ Systems, Inc., is in discussions with its investment bankers regarding the issuance of new bonds. The investment banker has informed the firm that different maturities will carry different coupon rates and sell at different prices. The firm must choose among several alternatives.$$

In each$$ case, the bonds will have a $$$$1,000$ par value and flotation costs will be $$$$35$ per bond. Calculate the $$before$-$tax cost of financing with the following alternative.

Coupon rate $=12\%$

Time to maturity $=13$ Years

Premium or discount $=-$ $$290$

The$$ before$-$tax cost of debt is $\%$