KatyDid clothes has a $150 million ($1,000 face value) 15-year bond issue selling for 106 percent of par that carries a coupon rate of 8 percent paid semi-annually. What would be KatyDid's before-tax component cost of debt?

A. 3.67 percent

B. 7.34 percent

C. 8.12 percent

D. 7.09 percent