Your employer asks you to evaluate an investment project. The firm is in the $22\%$ tax bracket and raises capital according to the following mix $40\%$ debt, $15\%$ preferred, and

$45\%$ common. What is the before$-$tax cost of debt if it issues $30-$year semi$-$annual coupon bonds at face value, the coupon rate is $6\mathrm{.}5\%,$ and the flotation cost is $$35$ per bond?

$7\mathrm{.}0\%$

$5\mathrm{.}69\%$

$6\mathrm{.}77\%$

D $6\mathrm{.}24\%.$