Quentin Inc. is considering issuing bonds to the market to raise $2 million. The bonds have an 8% coupon rate, payable semi-annually. Currently, the yield on these bonds is 6%. The investment dealer handling the issue has stated that the percentage before tax flotation costs will be 4%. Quentin has an income tax rate of 25%. What is Quentins cost of debt for this new issue?

a) 4.50%

b) 4.64%

c) 4.69%

d) 6.19%