Philly Company Common stock currently sells for $33, and is expected to pay a dividend of $.40 with a dividend growth rate of 8%, and flotation cost is $1.25. Preferred stock sells for $40, pays a dividend of $3.00, and carries a flotation cost of $1.10. Company bonds yield 7% in the market, and they are in the 30% tax bracket. WHAT IS THE COST OF DEBT? Indicate formula and answer