Calculate the firms cost of debt calculate the firms cost

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Reference no: EM13479116

Capital structure is
  • 40% debt,
  • 10% preferred stock, and
  • 50% common equity

Common stock currently sells for $35.00
The expected CS dividend is $1.50
Growth rate is 7.00%
Flotation cost on CS $1.45
Flotation cost on PS $1.10
Preferred stock sells for $48.00
PS pays a dividend of $4.00
Market yield on bonds is 9.75%
Tax rate is 34.00%

Calculate the firm's cost of debt Select one: A. 8.53% B. 6.44% C. 11.29%

Capital structure is
  • 40% debt,
  • 10% preferred stock, and
  • 50% common equity

Common stock currently sells for $45.00
The expected CS dividend is $2.00
Growth rate is 6.00%
Flotation cost on CS $2.25
Flotation cost on PS $1.10
Preferred stock sells for $50.00
PS pays a dividend of $4.00
Market yield on bonds is 11.25%
Tax rate is 34.00%

Calculate the firm's cost of preferred stock Select one: A. 7.43% B. 8.18% C. 10.44%

Reference no: EM13479116

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