Question $4$

$5$ pts

Several years ago, the Jakobe Company issued a $$1,000$ par value, non$-$callable bond that now has $20$ years to maturity and a $7\%$ annual coupon that is paid semiannually. The bond currently sells for $$875,$ and the company's tax rate is $40\%.$ What is the component aftertax cost of debt for use in the WACC calculation?

Your answer should be between $3\mathrm{.}34$ and $5\mathrm{.}43,$ rounded to $2$ decimal places, with no special characters.