The is the interest rate that a firm pays on any new debt financing. Three Waters Company (TWC) can borrow funds at an interest rate of 9.70% for a period of seven years. Its marginal federal-plus-state tax rate is 35 %. TWC's after-tax cost of debt is (rounded to two decimal places). At the present time, Three Waters Company (TWC) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,229.24 per bond, carry a coupon rate of 10 %, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 35%. If TWC wants to issue reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? new debt, what would be a 3.70% 2.77% O 2.46% O 3.08%