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Please be descriptive and show all work step-by-step. After-Tax Cost of Debt LL Incorporated's currently outstanding 7% coupon bonds have a yield to maturity of

Please be descriptive and show all work step-by-step.

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After-Tax Cost of Debt LL Incorporated's currently outstanding 7% coupon bonds have a yield to maturity of 4.2%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is LL's after-tax cost of debt? Round your answer to two decimal places. %

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