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Lexington's bonds have 15 years to maturity and a coupon rate of 7.5%. Interest is paid semi- annually. The bonds sold at par value, but

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Lexington's bonds have 15 years to maturity and a coupon rate of 7.5%. Interest is paid semi- annually. The bonds sold at par value, but the firm paid flotation costs amounting to 5% of par value. The firm has a marginal tax rate of 21%. What is the firm's after-tax cost of debt for these bonds? 7.5% 04.04% 5.93% O 6.38% O 6.36%

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