Suppose a company will issue new $10-$year debt with a par value of $$1,000,$ and a coupon rate of $7\mathrm{.}5\%,$ 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?

Question $16$ options:

$$980$ and $5\mathrm{.}52\%$

$$1000$ and $5\mathrm{.}65\%$

$$970$ and $5\mathrm{.}52\%$

$$970$ and $5\mathrm{.}65\%$