DL Trucking has a cost of equity of 14.4 percent and an unlevered cost of capital of 13 percent. The company has $20,000 in debt that is selling at par value. The levered value of the firm is $46,000 and the tax rate is 35 percent. What is the pretax cost of debt?
- 11.75%
- 10.20%
- 9.38%
- 11.20%
- 12.35%