ABC Company has publicly traded $1,000 par value, 6% semiannual coupon bonds which mature in 18 years.These bonds have a current market price of $915.The company also has preferred stock with a $70 par and 6% annual dividend.The market has priced the preferred stock at $89.ABCs common stock has a beta of 1.5.You estimate the risk-free rate to be 3% and the required return on the market to be 14%.The companys average tax rate is 34%.

What is this companys after-tax cost of debt?