What is the after-tax cost of debt for kimberly clark inc

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Following is the most recent FINRA bond quote for a Kimberly Clark Inc. corporate bond. (Assume semi-annual coupons)

Company (ticker)          Coupon          Maturity          Last Price

Kimberly Clark (KMB)        7.500          Apr 30, 2040           112.350

Question 1: What is the after-tax cost of debt for Kimberly Clark, Inc. assuming that floatation costs are 3% and that Kimberly Clark pays taxes at a 28% rate? (Assume today is April 30, 2020)

Option 1: 4.81%

Option 2: 4.96%

Option 3: 5.40%

Option 4: 6.68%

Option 5: 9.68%

Reference no: EM132506101

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