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Western Gas & Electric Company (WGC) can borrow funds at aninterest rate of 7.30% for a period of seven years. Its marginalfederal-plus-state tax rate is 45%. WGC’s after-tax cost of debtis    (rounded to two decimal places).At the present time, Western Gas & Electric Company (WGC)has 15-year noncallable bonds with a face value of $1,000 that areoutstanding. These bonds have a current market price of $1,136.50per bond, carry a coupon rate of 12%, and distribute annual couponpayments. The company incurs a federal-plus-state tax rate of 45%.If WGC wants to issue new debt, what would be a reasonable estimatefor its after-tax cost of debt (rounded to two decimal places)?(Note: Round your YTM rate to two decimal place.)1) 6.72%2) 4.48%3) 5.60%4) 6.44%