A company has 9.8 million shares of common stock outstanding, 420,000 shares of 5 percent preferred stock outstanding, and 220,000 8.6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $46 per share and has a beta of 1.40, the preferred stock currently sells for $96 per share, and the bonds have 15 years to maturity and sell for 117 percent of par. The market risk premium is 8.6 percent, T-bills are yielding 4 percent, and the companys tax rate is 40 percent.

What is the cost of debt ? Can you please display the inputs using a financial calculator ?