Dubbo Ltd's marginal tax rate is 30%. It has 5-year bonds with a coupon rate of 4% and a face value of $1,000. The coupon interest is paid semi-annually.The bonds are trading currently at a price of $1062 each. Determine the appropriate after-tax cost of debt for Dublin Ltd.

Question 27 options:

2.97%

1.34%

1.87%

2.67%