Logan holds a 7% interest-bearing debt instrument in Glow Co. Glow Co.'s tax rate is 27% and Logan is in a 45% tax bracket. Which of the following statements is correct? Multiple Choice The after-tax cost of the debt instrument is 5.11% to Glow Co. and the after-tax value to Logan is 3.85%.

The after-tax cost of the debt instrument is 5.11% to Glow Co. and the after-tax value to Logan is 3.15%.

The after-tax cost of the debt instrument is 1.89% to Glow Co. and the after-tax value to Logan is 3.15%.

The after-tax cost of the debt instrument is 7% to Glow Co. and the after-tax value to Logan is 7%.