Consider the following scenario (the given information is the same as in the previous question): Suppose a company has 100 million common shares outstanding, and each share sells for $20. We have estimated that the shares have a beta of 1.25, the risk- free rate is 2%, and the expected market return is 6%. The marginal tax rate for this company is 35%. The company also has $1 billion of bonds outstanding and the yield to maturity on these bonds is 4%. The company has a target capital structure of 60% equity and 40% debt. It does not and will not issue preferred stocks in the future. Suppose the company has the flotation costs of 10% for equity and 6% for debt. What is the company's weighted average flotation cost? A) 10.0% B) 8.4% C) 8.7% D) 6.0% Consider the following scenario (the given information is the same as in the previous question): Suppose a company has 100 million common shares outstanding, and each share sells for $20. We have estimated that the shares have a beta of 1.25, the risk- free rate is 2%, and the expected market return is 6%. The marginal tax rate for this company is 35%. The company also has $1 billion of bonds outstanding and the yield to maturity on these bonds is 4%. The company has a target capital structure of 60% equity and 40% debt. It does not and will not issue preferred stocks in the future. What is the after-tax cost of debt for this company? OA) 2.6% B) 7.0% C) 9.6% D) 4.0%