St. Johns Company is contemplating a new investment to be financed with debt. The firm could sell new $1,000 par value bonds with a 12.5% coupon rate and semi-annual payments. The bonds would mature in 15 years. The bonds would sell at par, but flotation costs would amount to 5.5% of par value. The firm has a 34% marginal tax rate. What is the firm's cost of debt financing? 17.5% O 14.4% O 8.8% 13.4% O 9.5%