A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $741.25. The company's federal-plus-state tax rate is 40%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places.

I get:

N=40

PV=-741.25

PMT=35

FV=1000

to get I/Y=5.01(2)=10.02(1-40%)=6.01 but my answer keeps coming up incorrect.