10. Porky Pine Co. is issuing a $1000 par value bond that pays8.5% interest annually. Investors are expected to pay $1100 forthe 12-year bond. Porky will pay $50 per bond in flotation costs.What is the after-tax cost of new debt if the firm is in the 35%tax bracket?8.23%4.55%4.70%7.45%