Use the following data for the next 5 questions: Debt 56,000 bonds with a 5.0% coupon rate, payable annually, 15 years to maturity, selling at $1,050 per bond. Common Stock 847,000 shares of common stock outstanding. The stock sells for a price of $67 per share and has a beta of 0.52. Preferred Stock 211,000 preferred shares outstanding, currently trading at $72.28 per share; with an annual dividend payment of $8.04, Market The market risk premium is 11% and the risk free rate is 6% Tax Rate 24%

What is the before tax cost of debt (Rd)? (Answer as a percentage and round to 2 decimals) Select one:

a. 1.98 % b. 7.79 % c. 4.53 % d. 1.84 % e. 6.85 %