The following data is regarding the Link Company: A target debt/equity ratio of 0.5 Bonds are currently yielding 10% Link is a constant growth firm that just paid a dividend of $3.00 Stock sells for $31.50 per share, and has a growth rate of 5% Marginal tax rate is 40% What is Link’s after-tax cost of capital()
A. 12.0%.
B. 12. 5%.
C. 11.0%.