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 percentage after-tax cost of debt?
Assume a face value of $1,000. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) After-tax cost of debt ___________ %