(Cost of debt)

Carraway Seed Company is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 14 years. Investors are willing to pay $935 for the bond. Flotation costs will be 12 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?

Please show all calculations