1. The Schenk Companys currently outstanding bonds have a 14.8 percent coupon and a 7.5 percent yield to maturity. Schenk believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40 percent, what is Schenks after-tax cost of debt?

   	a.	14.80%
   	b.	7.50%
   	c.	3.00%
   	d.	4.50%
   	e.	8.88%