Suppose your firm just issued a 20-year, $1000 par value bond with semiannual coupons. The coupon interest rate is 7%. The bonds sold for par value, but flotation costs amounted to 4% of the price. You have a 21% corporate tax rate. What is your firm's cost of debt?

a) 5.53%

b) 7.39%

c) 5.83%

d) 7.00%

e) 11.06%