Holly's Hominy Inc. has two bonds outstanding. The company's tax rate is $32$ percent.

Holly's first bond pays a $8$ percent coupon. The bond's face value is $$15$ million and the bond sells for $94$ percent of its face value. The bond's yield to maturity is currently $8\mathrm{.}601\%.$

The second debt issue is a zero coupon bond with $7$ years left to maturity. This bond's yield to maturity is currently $3\mathrm{.}581\%.$ The face value of this issue is $$80$ million and the bonds sell for $78$ percent of face value.

Required:

What is the company's after$-$tax cost of debt? Note: there is no need to convert rates from an APR to an EAR. $($Do not round your intermediate calculations.$)$

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