Nico Trading is considering issuing long term debt. The debt would have a 30 year maturity and a 10 percent coupon rate. In order to sell the issue, the bonds must be underpriced at a discount of 5 percent of face value. In addition, the firm would have to pay floatation costs of 5 percent of face value. The firm's tax rate is 35 percent. Given this information, show that the after-tax cost of debt for Nico Trading would be about 7.26%.