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(Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.4 percent annual interest and matures in 15 years. Investors are

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(Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.4 percent annual interest and matures in 15 years. Investors are willing to pay $950 for the bond and Temple faces a tax rate of 31 percent. What is Temple's after-tax cost of debt on the bond? The after-tax cost of debt is %. (Round to two decimal places.)

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