Ernst's Electrical Has a Bond Issue Outstanding with Ten Years

Ernst's Electrical has a bond issue outstanding with ten years to maturity.These bonds have a $1,000 face value,a 5 percent coupon,and pay interest semi-annually.The bonds are currently quoted at 96 percent of face value.What is Ernst's pre-tax cost of debt?

A) 4.47 percent
B) 4.97 percent
C) 5.33 percent
D) 5.53 percent
E) 5.94 percent