The is the interest rate that a firm pays on any new debt financing. Western Gas \& Electric Company (WGC) can borrow funds at an interest rate of 9.70% for a period of six years. Its marginal federal-plus-state tax rate is 35%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas \& Electric Company (WGC) has 10-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,092.79 per bond, carry a coupon rate of 11%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 35%. If WGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 5.57% 7.12% 7.43% 6.19%