Suppose that Coca-Cola is considering a new capital budgeting project. The project will use debt with maturities of 15 years. To determine the cost of debt for the project, an analyst at Coca-Cola looks at currently trading Coca-Cola debt. The analyst is looking at a Coke bond that trades today for $984.00. This bond has an annual coupon rate of 8.00%, face value of $1,000, and will mature in 15 years. The marginal tax rate for Coca-Cola is 38.00%.

What is the after-tax cost of debt for Coca-Cola?

Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))