Find the after-tax cost of debt for the following firm. 5 years ago, Niko Corporation issued bonds that originally had a maturity of 20 years. These bonds were $1,000 par value bonds that were issued with a 7% coupon rate. These bonds are currently selling for $1,100. Payments are made semiannually. Niko Corporation also has issued common stock in the past and has an estimated beta of 1.3. The stock has historically averaged a return of 12% and is expected to have a return of 10% this year. The stock just paid a dividend of $5 and is currently selling for $80. The firm expects common dividends to grow by 5% constantly forever. The firm additionally has preferred stock outstanding that was issued with a stated dividend of $3. Currently, the preferred stock is trading for $90. Niko Corporation commonly pays a tax rate of 40%. The firm is expecting to finance with 40% debt, 50% common equity, and the remainder as preferred stock. This year, the S&P 500 is producing an average return of 12% while Treasury bonds are average 2%.