Shanken Corp. issued a 20-year, 10 percent semiannual bond 4 years ago. The bond currently sells for 97 percent of its face value. The book value of the debt issue is $40 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 11 years left to maturity; the book value of this issue is $40 million and the bonds sell for 52 percent of par.

The companys tax rate is 38 percent.

The company's total book value of debt is $80,000,000

The company's total market value of debt is $59,600,000

What is your best estimate of the aftertax cost of debt?