A company has the following data associated with it: A target capital structure of 10% preferred stock, 50% common equity and 40% debt. Outstanding 20-year annual pay 6% coupon bonds selling for $894. Common stock selling for $45 per share that is expected to grow at 8% and expected to pay a $2 dividend one year from today. Their $100 par preferred stock currently sells for $90 and is earning 5%. The company’s tax rate is 40%. What is the after tax cost of debt capital and after tax cost of preferred stock capital Debt Capital Preferred Stock Capital（）①A. 4.2% 6.3% ②B. 4.5% 5.6% ③C. 4.2% 5.6%

A. ①

B. ②

C. ③