(Individual or component costs of capital) Compute the costs for the following sources of financing: a. A $1,000 par value bond with a market price of $960 and a coupon interest rate of 12 percent. Flotation costs for a new issue would be approximately 7 percent. The bonds mature in 8 years and the corporate tax rate is 22 percent. b. A preferred stock selling for $113 with an annual dividend payment of $9. The flotation cost will be $8 per share. The company's marginal tax rate is 22 percent. c. Retained earnings totaling $4.8 million. The price of the common stock is $71 per share, and dividend per share was $9.73 last year. The dividend is not expected to change in the future. d. New common stock for which the most recent dividend was $327. The company's dividends per share should continue to increase at a growth rate of 12 percent into the indefinite future. The market price of the stock is currently $62; however, flotation costs of $8 per share are expected if the new stock is issued. a. What is the firm's after-tax cost of debt on the bond? \%. (Round to two decimal places.)