Dog Gone Good Engines has a bond issue outstanding with 17 years to maturity. These bonds have a 1,000 face value, a 9 per cent coupon, and pay interest semi-annually. The bonds are currently quoted at 87 per cent of face value. What is the company's pre-tax cost of debt if the tax rate is 38 per cent?

Multiple Choice

a)10.67 per cent

b) 8.90 per cent

c) 4.10 per cent

d) 6.61 per cent

e)4.42 per cent