Princeps Corp has 7% coupon bonds outstanding that pay interest semiannually, and have 15 years remaining until maturity. The face value on each bond is $1000, and currently each bond is selling for $1050. This implies that the pre-tax marginal cost of debt for Princeps is

6.32%

13.23%

12.94%

6.47%

12.62%

Princeps Corp has 5% perpetual preferred stock outstanding that has a $50 par value per share, and pays annual dividends. The per-share price on this preferred is currently $44. This implies that the marginal cost of preferred stock for Princeps is:

11.36%

17.60%

5.68%

8.80%

4.40%