To calculate the WACC, Lewis Inc.$\text{'}$s CFO has collected the following information:

The company's capital structure consists of $40\%$ debt and $60\%$ common stock.

The company has $20-$year, $11\%$ annual coupon bonds that have a face value of $$1,000$ and sell for $$1,200.$

The company uses the CAPM to calculate the cost of common stock. Currently, the risk$-$free rate is $4\%$ and the market risk premium is $5\%.$ The company's common stock has a beta of $1\mathrm{.}5.$

The company's tax rate is $30\%.$

What is the company's after$-$tax cost of debt? Hint: rd$(1-$T$)$

$4\mathrm{.}50\%$

$9\mathrm{.}00\%$

$4\mathrm{.}80\%$

$6\mathrm{.}20\%$