Ford wants to raise debt by issuing bonds. The company currently has a 7% coupon rate bond that pays interest semi-annually. The bond matures in 10 years, has a $1000 face value, and is currently trading at $1043. Estimate the cost of debt for Ford? Assume that floatation costs are 2%.

Group of answer choices

6.47%

6.70%

3.24%

There is not enough information to answer this question

13.38%