Ausel's Furniture Stores Has Bonds Outstanding That Mature in 11

Ausel's Furniture Stores has bonds outstanding that mature in 11 years, have a 7 % coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,002. What is the company's pre-tax cost of debt?

A) 6.85 %
B) 6.97 %
C) 7.19 %
D) 7.28 %
E) 7.50 %