Kim's Convenience has outstanding corporate debt (face value of $1,000 per bond) that pays an 8.52% coupon rate semiannually and will mature in 23 years. The bonds are currently trading at $508 each. If the firm's tax rate is 36%, what is the firm's effective cost of debt?

Question 6 options:

A)

5.45%

B)

5.49%

C)

11.45%

D)

11.63%

E)

17.89%