Never-crash Airline has a capital structure that consists of 50% debt and 50% equity. The companys cost of debt is 6%. The company has a beta of 1.2. The risk free rate equals 4% and the expected return on the market portfolio is 15%. If the marginal corporate tax rate is 20%,

what is the Never-crash Airlines after tax cost of debt?

5.5%

4.62%

7%

4.8%