Before-tax cost of debtGronseth Drywall Systems, Inc., is in discussions with its investment bankers regarding the issuance of new bonds. The investment banker has informed the firm that different maturities will carry different coupon rates and sell at different prices. The firm must choose among several alternatives. In each case, the bonds will have a $ par value and flotation costs will be $1,000 per bond. Calculate the before-tax cost of financing with the following alternative.

Coupon rate 9% Time to maturity 20 years Premium or discount -$230

The before-tax cost of debt is... . (Round to two decimal places.)