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Suppose a company will issue new 1 0 - year debt with a par value of $ 1 , 0 0 0 , and a

Suppose a company will issue new 10-year debt with a par value of $1,000, and a coupon rate of 7.5%, paid annually. The tax rate is 30%. If the flotation cost is 3% of the issue proceeds, what are the present value and after-tax cost of debt?
$980 and 5.52%
$970 and 5.65%
$970 and 5.52%
$1000 and 5.65%
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