Crandal Dockworks is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 9% annual coupon bonds. The market price of the bonds is $1,070 each. Crandal's flotation expense on the new bonds will be $50 per bond. Crandal's marginal tax rate is 35%. What is the relevant cost of debt for the newly-issued bonds?

A) 8.76%

B) 5.69%

C) 8.17%

D) 5.31%