The Holmes Company's currently outstanding bonds have a 7% coupon and a 12% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar veld to maturity. If its marginal tax rate is 25%, what is Hoimes' after-tax cost of debt? Round your answer to two decimal places. Pearson Motors hus a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yleld to maturity on the company's outstanding bonds is 8%, and its tax rate is 25\%, Pearsar's CFO estmates that the company's wace is 10.40%. What is hearson's cost of common equity? Do not round intermediate calculations. Round your