10-1 AFTER-TAX COST OF DEBT The Holmes Company's currently outstanding bonds have an 8% coupon and a 10% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Holmes' after-tax cost of debt? -2 COST OF PREFERRED STOCK Torch Industries can issue perpetual preferred stock at a price of $57.00 a share. The stock would pay a constant annual dividend of $6.00 a share. What is the company's cost of preferred stock, rp