Question $3,$ Problem $9-4($similar to$)$

Points: $0$ of $1$

$($Cost of debt$)$ Carraway Seed Company is issuing a $$1,000$ par value bond that pays $12$ percent annual interest and matures in $7$ years. Investors are willing to pay $$935$ for the bond. Flotation costs will be $13$ percent of market value. The company is in a $38$ percent tax bracket. What will be the firm's after$-$tax cost of debt on the bond?

The firm's after$-$tax cost of debt on the bond will be $\%.($Round to two decimal places.$)$