Franklin Inc. has a $100 million (face value) 18-year bond i…

Franklin Inc. has a $100 million (face value) 18-year bond issue selling for 105 percent of par that pays a coupon of 7%.  What would Franklin’s before-tax component cost of debt?  Assume the par value of each bond is $1,000 and semiannual compounding.  Round your final answer to two decimal places.