Question $6$

A business's $$1000$ face value bonds are trading in the market for $$1,250.$ The bonds make annual coupon payments of $$70$ and mature in $6$ years. What is the pre$-$tax cost of debt?

$2\mathrm{.}99\%$

$4\mathrm{.}33\%$

$9,66\%$

$7\%$