The following data applies to the next three problems. W. Sharpe, Inc. has a target capital structure that calls for 40% debt, 10% preferred stock and 50% common equity. The firm's yield to maturity on its bonds is currently 10%, and it can sell as much debt as it wishes at this rate. The firm's preferred stock pays a dividend of $8 per share and the firm will get $64 per share from the sale of new preferred stock. Sharpe expects to retain $40,000 in earnings over the next year. Sharpe's common stock currently sells for $80 per share. The firm just paid a dividend of $4.00 per share on its common stock, and investors expect the dividend to grow indefinitely at a constant rate of 8% per year. The firm's tax rate is 40%. 13. What is the firm's cost of equity? 12.50% b. 14.17% d. a. 13.40% 16.15% c. 14. What is the firm's cost of preferred stock? a. 10.0% b. 11.8% c. 14.0% d. 12.5% 15. What is the firm's after-tax cost of debt? a. 6.0% b. 4.0% c. 5.4% d. 3.6%