Neptune Corporation's bonds have 20-years to maturity and a coupon rate of 8.5%. Interest is paid semi-annually. The bonds sold at par value, but the firm paid flotation costs amounting to 4% of par...

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Extracted text: Neptune Corporation's bonds have 20-years to maturity and a coupon rate of 8.5%. Interest is paid semi-annually. The bonds sold at par value, but the firm paid flotation costs amounting to 4% of par value. The firm has a marginal tax rate of 21%. What is the firm's after-tax cost of debt for these bonds? 8.93% O 7.06% 8.5% 6.72% O 7.40%