XYZ Company has a bond outstanding with 30 years remaining to maturity, a coupon rate of 8%, and semi-annual payments. If the current market price is $1,196.90, and the par value is $1,000, what is the after-tax cost of debt if the tax rate is 40%?

Select one:

a. 3.90%

b. 6.60%

c. 3.82%

d. 3.98%

e. 4.80%