Compute the rate of capital for the firm for the following:
1) A bond that has a $1000 par value and a coupon interest rate of 12.6% with interest paid semiannually. A new issue would sell for $1,145 per bond and mature in 20 years. The firm's tax rate is 34%. The after-tax cost of debt for the firm is _____%.
2) A preferred stock paying a dividend of 6.9% on a $91 par value. If a new issue is offered, the shares would sell for $86.43 per share.