Question: Tiny Tots has debt outstanding, currently selling for $900 per bond. It matures in 12 years, pays interest annually, and has a 14% coupon rate.

Tiny Tots has debt outstanding, currently selling for $900 per bond. It matures in 12 years, pays interest annually, and has a 14% coupon rate. Par is $1,000, and the firm's tax rate is 40%. What is the after-tax cost of debt? Round to two decimal places.

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