(Individual or component costs of capital) Compute the cost of the following: a. A bond that has $1,000 par value (face value) and a contract or coupon interest rate of 9 percent. A new issue would have a floatation cost of 7 percent of the $1,120 market value. The bonds mature in 12 years. The firm's average tax rate is 30 percent and its marginal tax rate is 23 percent. b. A new common stock issue that paid a $1.50 dividend last year. The par value of the stock is $15, and earnings per share have grown at a rate of 9 percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains a constant dividend-earnings ratio of 30 percent. The price of this stock is now $23, but 8 percent flotation costs are anticipated. c. Internal common equity when the current market price of the common stock is $43. The expected dividend this coming year should be $3.60, increasing thereafter at an annual growth rate of 11 percent. The corporation's tax rate is 23 percent. d. A preferred stock paying a dividend of 9 percent on a $130 par value. If a new issue is offered, flotation costs will be 15 percent of the current price of $172. a. What is the firm's after-tax cost of debt on the bond? (Round to two decimal places.)