To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Water and Power Company (WPC) can borrow funds at an interest rate of 7.30% for a period of seven years. Its marginal federal-plus-state tax rate is 30%. WPC's after-tax cost of debt is (rounded to two decimal places). 1 At the present time, Water and Power Company (WPC) has 20-year no callable bonds with a face value of $1,000 I that are outstanding. These bonds have a current market price of $1,181.96 per bond, carry a coupon rate of 13%, I and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 30%. If WPC wants to I issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? 7.53% 9.04% 6.78% 8.66%