Given the following information for Gerken Power Co., find the WACC. Assume the company's tax rate is 35 percent. Debt: 15,500 6.4% coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling 107% of par, the bonds make semiannual payments. Common stock: 495,000 shares outstanding, selling for $82 per share; beta is 1.20. Preferred stock: 20,000 shares of 4.20% preferred stock outstanding, currently selling for $90 per share. Market: 7% market risk premium and 3.10% risk-free rate. What is the after-tax cost of debt? 2.93% 5.86% 6.40% 3.81% None of the above