a target capital structure of 10% preferred stock

A company has the following data associated with it: . A target capital structure of 10% preferred stock, 50% common equity and 40% debt. Outstanding 20-year annual pay 6% coupon bonds selling for $894. . Common stock selling for $45 per share that is expected to grow at 8% and expected to pay a $2 dividend one year from today Their $100 par preferred stock currently sells for $90 and is earning 5%. . The company's tax rate is 40% What is the after-tax cost of debt capital and after-tax cost of preferred stock? Debt capital Preferred stock A) 45% 3.3% B) 42% 5.6% C) 42% 3.3%