Matsuyama Inc. sold a 10-year bond issue 3 years ago. The bond has a 6.45% annual coupon and a $1,000 face value. If the current market price of the bond is $830 and the tax rate is 35%, what is the after-tax cost of debt?

Select one:

a.

6.46%

b.

5.99%

c.

9.93%

d.

7.36%

e.

3.89%