Problem 3: a. Beverly HB, Inc. (BHB) has currently outstanding bonds with a 10% coupon and 7% yield to maturity. BHB could issue new bonds at par that would provide the same YTM. If BHB's marginal tax rate is 21%, what is the company's after-tax cost of debt? b. BHB is also thinking about issuing preferred stock. If the price would be $100 per share with an annual dividend of $7.50 per share, what is the company's cost of preferred stock? c. You have been asked to estimate the required return on common stock for BHB. If beta=0.9, the yield on a 10-year T-bond is 5% and the market risk premium is 7%, what is the estimated cost of common equity