You are analyzing the cost of debt for a firm. You know that the firm's 14-year maturity, 7.0 percent coupon bonds are selling at a price of $846.00. The bonds pay interest semiannually. If these bonds are the only debt outstanding, answer the following questions.

What is the after-tax cost of debt for this firm if it is subiect to 30 percent marginal and average tax rates? (Round final answer to 2 decimal places, e.g. 15.25%.)

After-tax cost of debt: %