1. A bond that has a $1000 par value (face value) and acontract or coupon interi

1. A bond that has a $1000 par value (face value) and acontract or coupon interior rate of 12%. A new issue would have aflotation cost of 6% of the market value. The bonds mature in 10years. The firms average tax rate is 30% and its marginal tax rateis 34%.The current price is $989. What is after tax cost ofdebt?