Micro Spinoffs, Inc., issued 10-year debt a year ago at par value with a coupon rate of 7%, paid annually. Today, the debt is selling at $1,350.

Micro Spinoffs, Inc., issued 10-year debt a year ago at par value with a coupon rate of 7%, paid annually. Today, the debt is selling at $1,350. If the firm’s tax bracket is 40%, what is its after-tax cost of debt? (Do not round intermediate calculations. Round your answer to 2 decimal places.) After-tax cost of debt