Lаgunа Tооls hаs semiannual cоupon bonds outstanding with a $1,000 face value. The bonds have a coupon rate of 7.20%, make semiannual coupon payments, and have 12 years remaining until maturity. The bonds are currently selling for $1,240. The company’s tax rate is 25%. What is Laguna Tools’ before-tax cost of debt?