Jiminy's Cricket Farm issued a 30-year, 6 percent coupon bond 4 years ago. The bond makes semi-annual coupon payments and sells for 86 percent of its face value. The face value of the debt issue is $22 million and the yield to maturity is 7.194%. Note: YTM for coupon bonds is quoted as an APR with semi-annual compounding.

In addition, the company has a second debt issue on the market, a zero coupon bond with 4 years left to maturity; the face value of this issue is $79 million and the bonds sell for 74 percent of face value. Note: Zero-coupon bonds only make one payment: face value which is paid at maturity.

Required:

	What is the pre-tax cost of debt for the zero coupon bond? Report this as an APR with semi-annual compounding. (Enter your answer as a percent, rounding to three decimals.)
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