Question: Bowen's Casinos recently sold an issue of 15-year maturity bonds. The bonds were sold at $955 each. After issuance costs, Bowen received $948 each. The bonds have a $1000 maturity value and a 7 percent coupon rate. The coupon is paid annually. What is the after-tax cost of debt for these bonds if Bowen's effective tax rate is 40 percent?
A. 4.25%
B. 4.55%
C. 5.25%
D. 5.55%