A firm has issued $25 million in long-term bonds that now have 9 years remaining until maturity. The bonds carry a 9% annual coupon and are selling in the market for $950.12. The firm also has $35 million in market value of common stock. For cost of capital purposes, what portion of the firm is debt financed and what is the after-tax cost of debt, if the tax rate is 30%? Group of answer choices 71.43% debt financed; 4.92% after-tax cost of debt 59.57% debt financed; 6.30% after-tax cost of debt 40.43% debt financed; 6.89% after-tax cost of debt 41.67% debt financed; 3.45% after-tax cost of debt
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