Company A has the following capital structure, which it considers to be optimal: Debt Preferred Stock Common Equity from retained earnings Common Equity from issuing new stocks Total Liabilities & Equity $40,000 $20,000 $30,000 $10,000 $100,000 The following information is relevant to Company A: Before-tax cost-of debt is 12%. The tax rate is 35%. Preferred stock with a dividend of $3 is currently sold to the public at a price of $30 per share, The common stock's last dividend paid was $1.5 per share, and its common stock currently sells for $35 per share, and dividends are expected to grow at a constant rate of 7%. The company can obtain new capital by selling new common stock to the public with a flotation cost of 6% 1. The after-tax cost of debt for Company A is O a. 4.2% O b. 7.8% O c. 12% d. 35% e. None of the above