Crandal Dockworks is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 10% semi-annual coupon bonds. The market price of the bonds is $1,090 each. Crandals flotation expense on the new bonds will be $40 per bonds. Crandals marginal tax rate is 40%. What is the After Tax Cost of Debt for the newly issued bonds?

a. 5.23%

b. 5.62%

c. 7.48%

d. 4.89%