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Carraway Seed Company is issuing a $1,000 par value bond that pays 6 percent annual interest and matures in 5 years. Investors are willing to

Carraway Seed Company is issuing a $1,000 par value bond that pays 6 percent annual interest and matures in 5 years. Investors are willing to pay $955 for the bond. Flotation costs will be 14 percent of market value. The company is in a 40 percent tax bracket. What will be the firm's after-tax cost of debt on the bond?

The firm's after-tax cost of debt on the bond will be....%?

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