Let the cost price be CP.
Seling price = (1+ 0.26) = 1.26 CP
Let the marked price be MP.
Discount 10% on marked price so selling price = (1-0.1) = 0.9 MP
1.26 CP = 0.9 MP
MP/CP =1.26/0.9 = 1.4
Percentage increase=(MP-CP)x100/CP
= 100MP/CP -100
= 140 -100
= 40 %
Hence the marked price is 40 % above the cost price.