Individual or component costs of capital) compute the cost of capital for the firm for the following:
a. A bond that has a $1,000 par value (Face value) and a contract or coupon interest rate of 10.3 percent. Interest payments are $51.50 and are paid semi-annually. The bonds have a current market value of $1,129 and will mature in 10 years. The firm's marginal tax rate is 34 percent.
b. A new common stock issue that paid a $1.79 dividend last year. The firm's dividends are expected to continue to grow at 6.2 percent per year, forever. The price of the firm's common stock is now $27.22.
c. A preferred stock that sells for $130, pays a dividend of 8.7 percent, and has a $100 par value.
d. bond selling to yield 12.8 percent where the firm's tax rate is 34 percent.
The after-tax cost of debt is ___%. (Round to two decimal places.)