The Zephyr Corporation is contemplating a new investment to be financed 33 percent from debt. The firm could sell new $1,000 par value bonds at a net price of $955. The coupon interest rate is 13 percent, and the bonds would mature in 12 years. If the company is in a 20 percent tax bracket, what is the after-tax cost of capital to Zephyr for bonds?

The after-tax cost of capital to Zephyr for bonds is?