Dog Gone Good Engines Has a Bond Issue Outstanding with 17

Dog Gone Good Engines has a bond issue outstanding with 17 years to maturity. These bonds have a $1,000 face value, a 9 percent coupon, and pay interest semi-annually. The bonds are currently quoted at 87 percent of face value. What is the company's pre-tax cost of debt if the tax rate is 38 percent?

A) 4.10 percent
B) 4.42 percent
C) 6.61 percent
D) 8.90 percent
E) 10.67 percent