(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 8 percent annual interest and matures in 5 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?

The firm's after-tax cost of debt on the bond will be __% (Round to two decimal places.)