laue Assi hiMentT Read Chapter 101 Back to Assignment Due Tuesday 11.27.18 at Attempts: [] Keep the Highest: 13 3. Cost of debt Aa Aa The is the interest rate that a firm pays on any new debt financing Andalusian Limited (AL) can borrow funds at an interest rate of 9.70% for a period of five years. Its marginal federal-plus-state tax rate is 30%. AL's after-tax cost of debt is (rounded to two decimal places). At the present time, Andalusian Limited (AL) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,181.96 per bond, carry a coupon rate of 13%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 30%. If AL wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places? 6.02% 7.53% 8.66% O 6.78%