1) LL Incorporated's currently outstanding 9% coupon bonds have a yield to maturity of 6.6%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is LL's after-tax cost of debt? Round your answer to two decimal places.

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2)

Burnwood Tech plans to issue some $80 par preferred stock with a 6% dividend. A similar stock is selling on the market for $95. Burnwood must pay flotation costs of 5% of the issue price. What is the cost of the preferred stock? Round your answer to two decimal places.

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