Builtrite Furniture is considering sells bonds for a plant expansion. Currently, Builtrite believes that it could sell 10-year maturity, $1000 par value, 5 5/8% coupon bonds after flotation costs for $970. If Builtrite is in the 34% marginal tax bracket, what is the after-tax cost for the bonds?

4.10%

3.99%

3.62%

3.34%