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Builtrite Furniture is considering sells bonds for a plant expansion. Currently, Builtrite believes that it could sell 10year maturity, $1000 par value, 45/8% coupon bonds

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Builtrite Furniture is considering sells bonds for a plant expansion. Currently, Builtrite believes that it could sell 10year maturity, $1000 par value, 45/8% coupon bonds after flotation costs for $950. If Builtrite is in the 34% marginal bracket, what is the after-tax cost for the bonds? 3.99% 3.50% 5.30%

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