The long-term-debt component of South Bay Co.s capital structure consists of a single bond issue with a face value of $100 million. These bonds carry a coupon of 6% paid semi-annually and have seven years remaining until maturity. At their current total market value of 105,250,000, the bond YTM is 5.1%. Assuming that flotation costs are 6% before tax on a new debt issue and that South Bays tax rate is 28%, calculate South Bays component cost of debt