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The cost of debt?Gronseth Drywall Systems, Inc., is indiscussions with its investment bankers regarding the issuance ofnew bonds. The investment banker has informed the firm thatdifferent maturities will carry different coupon rates and sell atdifferent prices. The firm must choose among several alternatives.In each case, the bonds will have a $1,000 par value and flotationcosts will be $35 per bond. The company is taxed at 21%. Use theapproximation formula to calculate the after-tax cost of financingwith the following alternative.?Coupon RateTime to maturityPremium or discount6%16 years$200(Click on the icon located on the top-right corner of the datatable below in order to copy its contents into a spread sheet.)The after-tax cost of financing using the approximation formulais _____ % (Round to two decimal places.)
