The Jolly Jordan Company has the following capital structure that it considers optimal: Debt = 4096 Preferred Stock = 10% Common Stock = 50% The firm plans to spend $100,000,000 on new capital projects. The firm has one bond issue outstanding with 10 years to maturity, semiannual payments, coupon rate of 896, face value of $1,000 per bond and a current price of $1,100. The firm's marginal tax rate is 40%. Preferred stock can be sold with a dividend of $2.75, a par value of $25.00, and a floatation cost of $2.00 per share. Common stock is presently selling at $35.00 per share and new shares can be issued with a $3.00 per share floatation cost. The last dividend paid was $4.00 and the firm expects to grow at a rate of 49 in the foreseeable future. Calculate the firm's net cost of debt. O a. 1.9996 Ob.4.80% C. 3.97% Od. 6.6296 Oe. None of these are correct