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GHS Inc. is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 6% annual coupon bonds. The market price

GHS Inc. is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 6% annual coupon bonds. The market price of the bonds is $975 each. Flotation expense on the new bonds will be $55 per bond. Candlel's marginal tax rate is 40%. What is the cost of debt on the newly-issued bonds?

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