Micro Spinoffs, Inc., issued 20-year debt one year ago today at par value with a coupon rate of 9 percent, paid annually. Today, the debt is selling at $1,050. If the firm's tax rate is 34 percent, what is its after-tax cost of debt?

Multiple Choice

• 9 percent

• 5.58 percent

• 5.94 percent

• 8.46 percent