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Dallas Inc. issued a noncallable bond 5 years ago that now has 10 years to maturity. This bond has a 9.25% coupon rate with an

Dallas Inc. issued a noncallable bond 5 years ago that now has 10 years to maturity. This bond has a 9.25% coupon rate with an annual payment and a $1,000 face value. This bond currently sells at a price of $1,075. If the firms tax rate is 25%, what is the after-tax cost of debt?

A. 8.13%

B. 6.27%

C. 7.43%

D. 6.09%

E. 8.35%

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