If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent coupon, 3% floatation costs, $1,000 par value semiannual bond selling at $1,150 is ________.

A) 3.18 percent

B) 6.36 percent

C) 3.82 percent

D) 6.59 percent