(Cost of debt) Temple-Midland, Inc. is issuing a

$1,000

par value bond that pays

7.7

percent annual interest and matures in

15

years. Investors are willing to pay

$951

for the bond and Temple faces a tax rate of

35

percent. What is Temple's after-tax cost of debt on the bond?

The after-tax cost of debt is

enter your response here%.

(Round to two decimal places.)