Assets (in Millions) Current Net Fixed Liabilities & Equity $40 $60 Bonds ($1000 Par) Preferred Stock ($100 Par) Common Stock ($1 par) Total 50 30 20 $100 Total $100 The company has some bonds outstanding with coupon rate of 14% and semi-annual payments, the bonds currently sell for $996. The maturity of those bonds is 10 years. The company's applicable tax rate is 40%. The preferred stocks pay quarterly dividend of $1.75 and their market price is $84.50. The dividends of the common stocks of this company have been growing steadily at 6% per year, and this growth rate is expected to continue in the future. Last year's dividend was $1.45 The floatation cost for new common stocks is 10%. The floatation cost on preferred stock is 5%. The market value of the common stock is $15.5 Assume the company is going to issue new preferred stocks and new common stocks What is the cost of debt