单选题 The company has a target capital structure of 40 percent debt and 60 percent equity. Bonds pay 10 percent coupon (semi-annual payout ), mature in 20 years, and sell for $849.54.
The company stock beta is 1.2.
Risk-free rate is 10 percent, and market risk premium is 5 percent.
The company is a constant growth firm that just paid a dividend of $2.00, sells for $27.00 per share, and has a growth rate of 8 percent.
The company's marginal tax rate is 40 percent.
The after-tax cost of debt is:

• A. 8.0%.
• B. 9.1%.
• C. 7.2%.