Use the following data to answer Questions 7 through 10. A company has a target capital structure of 40% debt and 60% equity. The company's bonds with face value of $1,000 pay a 10% coupon (semiannual), mature in 20 years, and sell for $849.54 with a yield to maturity of 12%. The company stock beta is 1.2. Risk-free rate is 10%, and market risk premium is 5%. The company is a constant-growth firm that just paid a dividend of $2, sells for $27 per share, and has a growth rate of 8%. The company's marginal tax rate is 40%. 7. The company's after-tax cost of debt is: A. 7.2% B. 8.0% C. 9.1%. 8. The company's cost of equity using the capital asset pricing model (CAPM) approach is: A. 16.0% B.16.6%. C. 16.9% 9. The company's cost of equity using the dividend discount model is: 15.4%. 16.0% C. 16.6% A. B