Compute the cost of capital for the firm for the following:

a. A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 10.2 percent. Interest payments are $51.00 and are paid semiannually. The bonds have a current market value of $1,128 and will mature in 10 years. The firm's marginal tax rate is 34 percent.

b. A new common stock issue that paid a $1.85 dividend last year. The firm's dividend are expected to continue to grow at 6.8 percent per year, forever. The price of the firm's common stock is now $27.18.

c. A preferred stock that sells for $128, pays a dividend of 9.4 percent, and has a $100 par value.

d. A bond selling to yield 11.9 percent where the firm's tax rate is 34 percent.

A. The after-tax cost of debt is ___% (round to two decimal places.)