\begin{tabular}{lrrr} \hline Firm & A & B & C \\ \hline Before Tax & & & \\ Cost of Debt & 9.5 & 9.0 & 13.0 \\ Cost of Equity & 15.0 & 13.0 & 18.0 \\ Cost of Preferred & 11.0 & 10.5 & N/A \\ \hline Existing & & & \\ Debt/Capitalization & 23.0 & 42.0 & 17.0 \\ Equity/Capitalization & 70.0 & 45.0 & 83.0 \\ Preferred/Capitalization & 7.0 & 13.0 & 0.0 \\ \hline Target & & & \\ Debt/Capitalization & 25.0 & 45.0 & 38.0 \\ Equity/Capitalization & 75.0 & 45.0 & 62.0 \\ Preferred/Capitalization & 0.0 & 10.0 & 0.0 \\ \hline Marginal Tax Rate & 42.0 & 36.0 & 40.0 \end{tabular} What is Firm B's after-tax cost of debt? % Submit