Joy, Inc. is planning on issuing new bonds to raise capital. Joys investment banking firm indicates that different maturities will carry different coupon rates and thus sell at different prices. Each bond issue, however, will have a $1000 par value, with flotation costs of $50 per bond. Joys tax rate is 21%. a. Calculate Joys current required rate of return of their long-term debt for each of the following alternatives.

Alternative	Coupon Rate	Time to Maturity (Years)	Premium (Discount)
A	7.2%	6	$50
B	6.7%	7	$0
C	6.5%	12	($60)
D	8.5%	18	$95

b. Assume that Joy, Inc. plans on issuing new long-term debt to sell at par. Calculate the before-tax and after-tax cost of debt for each alternative.