Fatemi Inc.s debt consists entirely of two bank loans and two outstanding bond issues: Loan A has an interest rate of 12%; Loan B has an interest rate of 10%. Bond A has a coupon rate of 8% which it pays annually; Bond A matures in 5 Years and is currently trading at $794.02. Bond B matures in 2 years and pays no coupon and is currently trading at $718.18. Both bonds have par values of $1,000. Assuming that the firm uses the following weights: Loan A = 0.30; Loan B = 0.15; Bond A = 0.15; and Bond B = 0.40, what is Fatemi Inc.s pretax cost of debt (r_D)?