Temple-Midland, Inc. is issuing a

$1,000

par value bond that pays

8.1

percent annual interest and matures in

15

years. Investors are willing to pay

$954

for the bond and Temple faces a tax rate of

35

percent. What is Temple's after-tax cost of debt on the bond?

Question content area bottom

Part 1

The after-tax cost of debt is

enter your response here%.

(Round to two decimal places.)