Dowe, Cheatem, and Howe's bonds are currently selling for 115 percent of face value. These are 25-year, semi-annual bonds outstanding with a 7% coupon. The face amount of each bond is $1,000. What is the company's pre-tax cost of debt?

Group of answer choices

10.94%

5.85%

10.39%

3.69%

4.82%