1. Minaj Mirage, a cosmetics company is launching a new line of skin care. It is looking at two different options to finance its expansion, which will cost $510,000510,000. Assume that the companys tax rate is 2828%.

• It could borrow the entire $510,000510,000 from a local bank, at an interest rate of 33% per year (Plan A).
• It could issue 5,1005,100 shares of $22 cumulative preferred stock for $100100 each (Plan B).

Round answers to nearest whole number (e.g. 1,355)

1. Calculate the annual after-tax cost (in dollars) of plan A

Answer: $Answer

2. Calculate the annual after-tax cost (in dollars) of plan B

Answer: $Answer