Carraway Seed Company is issuing a $1,000 par value bond that pays 8 percent annual interest and matures in 15 years. Investors are willing to pay $980 for the bond. Flotation costs will be 9 percent of market value. The company is in a 38 percent tax bracket. What will be the firm's after-tax cost of debt on the bond? he firm's after-tax cost of debt on the bond will be (Round to two decimal places.)