Hewlett-Packard Company (HPQ) has an interest coverage ratio of 2.7. Assume the marginal tax rate of 35%. The risk-free rate of 4% and HPQ market cap is $5.5 billion. What is the post-tax cost of debt based on the following two tables?

For developed market firms with market cap > $5 billion If interest coverage ratio is Sto 0.199999 0.649999 0.799999 1.249999 1.499999 1.749999 1.999999 2.2499999 2.49999 2.999999 4.249999 5.499999 6.499999 8.499999 100000 -100000 0.2 0.65 0.8 1.25 1.5 1.75 2 2.25 2.5 3 4.25 5.5 6.5 8.50 If interest coverage ratio is greater than S to 0.499999 -100000 0.5 0.8 1.25 1.5 2 2.5 3 3.5 4 4.5 6 7.5 9.5 12.5 Rating is D2/D C2/C Ca2/CC Caa CCC 0.799999 1.249999 1.499999 1.999999 2.499999 2.999999 3.499999 3.9999999 4.499999 5.999999 7.499999 9.499999 12.499999 100000 B3/B- B2/B B1/B+ Ba2/BB Bal/BB+ Baa2 BBB A3/A- A2/A A1/A+ Aa2/AA Aaa/AAA For all emerging market firms and developed market firms with market cap < $5 billion Rating is D2/D C2/C Ca2/CC Caa CCC Spread is 19.38% B3/B- B2/B 81/8+ Ba2 BB Bal/BB+ Baa2 BBB A3/A- A2/A A1/A+ Aa2/AA Aaa/AAA 14.54% 11.08% 9.00% 6.60% 5.40% 4.50% 3.60% 3.00% 2.00% 1.56% 1.38% 1.25% 1,00% 0.75% Spread is 19.38% 14.54% 11.08% 9.00% 6.60% 5.40% 4.50% 3.60% 3.00% 2.00% 1.56% 1.38% 1.25% 1.00% 0.75%