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( Cost of debt ) Carraway Seed Company is issuing a $ 1 , 0 0 0 par value bond that pays 8 percent annual

(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 8 percent annual interest and matures in 11 years. Investors are willing to pay $935 for the bond. Flotation costs will be 13 percent of market value. The company is in a 39 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
%.(Round to two decimal places.)
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