The debt of Savanna Equipment, Incorporated has an average maturity of ten years and a BBB rating. A market yield to maturity is not available because the debt is not publicly traded, but the market yield on debt with similar characteristics is 8.33%. Savanna is planning to issue new ten-year notes that would be subordinate to the firms existing debt. The companys marginal tax rate is 40%. The most appropriate estimate of the after-tax cost of this new debt is: