Mojave Corp. issued 10-year bonds six years ago. The bonds have an annual coupon rate of 3 percent and are now yielding 7.5 percent. Coupons are paid semiannually. Mojaves income tax rate is 21 percent. What is the annual aftertax cost of the firms debt?

Multiple Choice:

4.74% 2.37% 5.93% 2.96% 11.85%