You have collected the following data: The outstanding debt instrument (bonds) yield is estimated at 7.75%; the applicable tax rate is 34%; the company is expected to have its next (expected) dividend is $0.65 a share; the dividend growth rate is expected to be at a constant rate of 6.00% a year. The current stock price is $18.00 per share; the flotation cost for issuing debt is estimated at Fd = 5%; the flotation cost for selling new shares is estimated at Fcs = 10%; The target capital structure is 40% debt and 60% common equity. What is the best estimate of the firm's after-tax cost of current debt?