what is the after tax cost of debt for a company with 4 million shares of common stock issued and outstanding closing common stock price per share rs 10, 2 million shares of preferred stock issued and outstanding, closing preferred stock price per share rs 16, 10 million face value of bonds issued and outstanding, closing bond price: 80(80% of face value), Cost of common equity for XYZ: 25% and cumulative, nonparticipating dividend on the preferred stock: rs. 2.40 per share every year with the cost of debt before tax effect: 10% and income tax rate: 40%.

a. 4%

b. 5%

c .6%

d. 8%