Construction Services has outstanding bonds with par value of $1,000 and currently selling for $970 per bond. The bonds mature in 6.5 years and pay semiannual coupon of 7%. What is the firm's pretax cost of debt?

Group of answer choices

a) 7.59 percent

b) 7.74 percent

c) 7.80 percent

d) 8.21 percent

e) 7.08 percent