Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,100. If the firms tax bracket is 20%, what is its after-tax cost of debt? Assume a face value of $1,000.

Please do not copy from Chegg. Only attempt if you are sure about the answer. Solve in a step by step manner, explaining each step.