Crandal Dockworks is undergoing a major expansion. The expansion will be financed by issuing new 15 - year, $1,000 par, 9% annual coupon bonds. The market price of the bonds is $1,070 each. Five Rivers flotation expense on the new bonds will be $50 per bond. Crandals marginal tax rate is 35%. What is the after-tax cost of debt?
A. 5.69%
B. 8.76%
C. 3.06%
D. 8.17%