A firms capital structure consists of 30% long-term debt. At present, the company can raise debt by selling 23-year bonds with a 11.79% annual coupon interest rate. The firm is in a 40.53% income tax bracket. Its bonds generally require an average discount of $45 per bond and flotation costs of $30 per bond when being sold.

Required: Calculate the firms current after-tax cost of long-term debt.

Answer% (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)