d. 6.0%

Rumper Role recently sold a 15 year $1,000 face value bond at a discount for $700 that net the firm $692 after flotation costs. The low coupon bond has a 6% coupon with interest paid semiannually. If Rumper Role has a marginal tax rate of 40 percent, what is its after-tax cost of debt for these bonds? 10.0% 9.2% 7.8%