Olympic Sports has two issues of debt outstanding. One is a 19% coupon bond with a face value of $28 million, a maturity of 8 years, and a yield to maturity of 7%. The coupons are paid annually. The other bond issue will mature in the next year, with coupons also paid annually, and a coupon rate of 3%. The face value of the issue is $17 million, and the issue sells for 90% of par value.

What is the before-tax cost of debt for Olympic?