Bender and Co. is issuing a $1000 par value bond thatpays 9% interest annually.

Bender and Co. is issuing a $1000 par value bond thatpays 9% interest annually. Investors are expected to pay $918 forthe 10-year bond. Bender will have to pay $33 per bond in flotationcosts. What is the cost of debt if the firm is in the 34% taxbracket?