Bards and Yards has 10-year bonds outstanding that carry an annual coupon of 8 percent. The bonds mature in 7 years and are currently priced at 108.4 percent of face value. What is the firm's pre-tax cost of debt?
Question 7 options:
1) 6.47 percent
2) 6.82 percent
3) 7.34 percent
4) 7.70 percent
5) 8.23 percent