What is the before-tax cost of debt of a companys new bond that has a coupon rate of 8% with semiannual coupons, a maturity of 20 years, and a par value of $1,000? The new bond can be sold to the public at $1,080.80 but the company must pay a flotation cost of $40 per bond to sell it.

Group of answer choices

7.6%

8.0%

3.8%

7.23%