Crandal Frontier is undergoing a major expansion. The expansion will be financed by issuing new 20-year, $1,000 par, 9.5% semi-annual coupon bonds. The market price of the bonds is $1,085 each. Crandal's flotation expense on the new bonds will be $65 per bond. Crandal's marginal tax rate is 35%. What is the after-tax cost of debt for the newly-issued bonds?