AAA's 10-year $1,000 par value 7.0% annual coupon bonds with semiannual payments are trading for $869.92 and have a yield to maturity of 9.0%. If the company were to issue new bonds, they would be issued for $1,000 each and have a coupon rate and yield to maturity equal to the yield to maturity on the current bonds. They would, however, also have a flotation cost of 4.0%. The firm's tax rate is 40.0%. Find the bonds' after-tax required return for cost of capital purposes.